Indian IT companies experienced a sharp sell-off on Tuesday, May 12, following OpenAI's launch of OpenAI Deployment Company. According to reports from CNBC TV18, shares of TCS, Infosys, and HCLTech fell to multi-year lows as investors reacted to the development. This followed Anthropic's similar move just seven days earlier on May 4th, when it launched a similar AI-native enterprise services firm backed by major PE firms including Blackstone, Hellman & Friedman, Goldman Sachs, Apollo, General Atlantic, GIC, and Sequoia Capital.
The primary concern for Indian IT companies centers on access and control. As reported by CNBC TV18, OpenAI and Anthropic's PE partners collectively sponsor thousands of portfolio companies, raising questions about whether PE firms can mandate OpenAI-first or Claude-first deployments across entire portfolios, potentially bypassing traditional IT vendors entirely. This could potentially make request for proposals a formality, significantly impacting the traditional IT services model.
OpenAI's $4 billion Deployment Company represents a significant escalation in competitive capabilities, as reported in recent developments. The initiative boosts the firm's ability to embed Forward Deployed Engineers (FDEs) within client organizations, mirroring Palantir's successful model. The subsidiary is a partnership between OpenAI and 19 global investment firms, consultants, and system integrators, with private equity firm TPG leading alongside co-lead founding partners Advent, Bain Capital, and Brookfield. In addition, OpenAI has agreed to acquire Tomoro, an applied AI consulting firm, bringing approximately 150 FDEs into the subsidiary to embed inside client organizations and redesign workflows.
Despite concerns, analysts suggest that the competitive dynamic between Indian IT companies and LLM giants will likely mirror existing partnership models, as reported by CNBC TV18. Infosys has already partnered with both OpenAI and Anthropic, integrating Codex into its Topaz AI platform and building Claude-powered agents. The market fears that OpenAI and Anthropic will capture the strategy and design layer of projects, potentially leaving Indian IT companies with execution or lower-margin 'run the business' work. However, the view from analysts suggests that just as every company has both direct channel sales and partnership sales, this dynamic will likely play out between Indian IT and these LLM giants as well.
