Infosys Shares Drop 6% as AI Disruption Fears Ripple Through IT Sector
Infosys led a broad selloff in Indian IT stocks, plunging nearly 6% as investors reassessed sector valuations amid growing AI automation threats. The Nifty IT index fell 2% in sympathy, with Wipro and TCS dropping 2.5% and 3.3% respectively.
The catalyst came from U.S. startup Anthropic's new legal AI tools, spotlighting how enterprise automation could erode the labor arbitrage model that built India's $245 billion IT services industry. Contract review bots now threaten the compliance and back-office workflows that account for 30-40% of revenue at firms like Infosys.
Indian majors are responding aggressively - Wipro and TCS have already trained over 250,000 employees in AI implementation. The pivot toward AI-as-a-service platforms may cushion margins, but not before 2026 earnings face pressure as clients renegotiate outsourcing contracts.
