Indian benchmark indices opened higher on Friday, tracking positive global cues, but the IT sector came under sharp pressure. The announcement of a new AI model, Mythos, by Anthropic weighed heavily on technology stocks. The Nifty IT index dropped nearly 3 percent, with almost all its constituents trading in the red.
Shares of Infosys, Tata Consultancy Services, and Mphasis declined, while Coforge recorded the steepest fall. However, Wipro bucked the trend and posted gains after announcing it would consider a share buyback on April 16.
What is the Mythos model
Anthropic developed Mythos specifically for cybersecurity and coding applications. The company claims the model can detect and fix errors faster and more accurately than humans and previous AI systems. It is currently testing the model with a select group of partners under Project Glasswing, including Amazon, Google, Microsoft, and Nvidia
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Why the IT sector reacted
Market experts say advanced AI models like Mythos could disrupt the traditional business models of IT services companies. Enterprises may increasingly rely on AI tools for coding, cybersecurity, and other technical tasks, potentially reducing demand for outsourcing. Fearing a slowdown in future revenue growth, investors intensified selling in IT stocks.
TCS data added to concerns
Recent results from Tata Consultancy Services further unsettled investors. The company reported a decline in dollar revenue for the first time since its listing. Although the fourth quarter showed marginal improvement, the overall performance remained weak, denting market confidence.
Sector already under strain
The IT sector has faced sustained pressure in recent months. In February, the Nifty IT index had already fallen nearly 20 percent amid growing concerns that AI-driven startups could disrupt traditional IT service providers.
Analysts believe the rapid expansion of AI presents both risks and opportunities. Companies that quickly integrate AI into their operations are likely to stay competitive, while those that lag behind may struggle to maintain growth.
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