Indian IT companies experienced significant selling pressure on Thursday, May 14, with shares falling as much as 5% and extending their losing streak to a third consecutive session. According to reports from CNBC TV18, among the worst performers were Persistent Systems, Coforge, Mphasis and LTIMindtree, which declined between 3% and 5%. Heavyweight companies including Wipro, Tata Consultancy Services and Infosys were down 2% to 3%. The Nifty IT Index extended its weekly decline to 7%, underperforming the benchmark Nifty 50 index which gained 0.8%.
The continued sell-off follows OpenAI's announcement of the launch of the OpenAI Deployment Company, a new venture designed to help enterprises build and deploy AI systems for day-to-day operations. As reported by CNBC TV18, the initiative is backed by 19 global investment firms, consultancies and system integrators, including TPG, Advent International, Bain Capital, Brookfield Corporation, Goldman Sachs, SoftBank Group and Warburg Pincus. The new model could disrupt traditional IT services structure as OpenAI plans to place forward-deployed engineers directly within client organizations to identify AI opportunities, redesign workflows and deploy production-scale AI systems.
Citi's India Research Head Surendra Goyal flags a tougher macro setup driven by rising oil prices, a weaker rupee, and El Niño risks. According to CNBC TV18, Goyal warns of earnings downside if oil stays above $100. On IT services, Goyal remains underweight, citing competitive fragmentation, GCC expansion, and growing AI disruption from players like OpenAI and Claude. While Q4 earnings are broadly in line at ~9% EBITDA growth, June quarter numbers will be the real test for the sector's resilience.
The concerns intensified after Anthropic launched a similar AI-native enterprise services business earlier this month, backed by investors including Blackstone, Hellman & Friedman, Apollo Global Management and Sequoia Capital. According to market participants, these developments could control the higher-value strategy and workflow design layer, potentially leaving traditional IT firms with lower-margin execution work. However, Indian IT companies have consistently maintained that they remain critical partners for enterprises due to their understanding of clients' legacy infrastructure and ability to manage implementation risks.
Despite competitive concerns, analysts note that Indian IT firms themselves have partnerships with AI companies. Infosys, for instance, has partnered with both OpenAI and Anthropic, integrating Codex into its Topaz AI platform and developing Claude-powered AI agents. As reported by CNBC TV18, analysts believe the relationship between IT firms and large language model providers could eventually evolve into a mix of direct competition and collaboration. The continued sell-off has dragged the Nifty IT Index over 40% below its record high hit in December 2024.
