The artificial intelligence race may be entering an uncomfortable new phase for Indian IT companies. According to Jefferies, AI startup Anthropic's entry into the IT services space could create a fresh competitive threat for traditional outsourcing firms, particularly because AI-native companies control the very frontier models enterprises increasingly want access to. In a note titled “Anthropic's services foray — another area of P(AI)n,” the brokerage warned that the move has implications extending far beyond consulting hype.
The concern is not just that AI firms are becoming service providers, but that they may eventually compete directly with incumbent IT vendors for transformation budgets, enterprise relationships and new client additions.
Anthropic recently launched an AI-native enterprise services firm in partnership with a consortium of private equity and asset management firms including Blackstone, Hellman & Friedman and Goldman Sachs. The company, backed by investors such as Amazon and Google, plans to advise enterprises on deploying AI solutions across manufacturing, financial services, retail and real estate.
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What's The Issue?
Jefferies believes this changes the equation because companies like Anthropic own the underlying frontier AI models themselves. That creates a structural edge over IT service firms that rely on partnerships with external model providers. “Its ownership/access to frontier models may place other IT service competitors at a disadvantage,” the brokerage said.
The report added that this could affect one of the most important growth levers for IT companies — client additions. Mid-sized firms, which are aggressively pitching AI-led transformation projects to drive growth, may feel the pressure more acutely. At one level, Jefferies acknowledged that Anthropic's move validates the relevance of IT services. Enterprises still need advisory, implementation and managed services support to integrate AI into day-to-day operations.
But the brokerage also warned that a new class of competitors is emerging — firms that not only build the technology but can also deploy and manage it end-to-end. “The emergence of new competition that owns their own frontier models is a risk one can't ignore,” Jefferies said.
That could potentially compress pricing power for traditional vendors and intensify competition in high-growth AI spending areas that Indian IT firms have been banking on to offset slower discretionary tech demand.
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Jefferies Says ‘Stay Selective'
The brokerage maintained a cautious stance on the sector, advising investors to remain selective amid the changing AI landscape. Among mid-cap names, Jefferies continues to prefer Coforge, while Sagility and IKS remain its preferred picks in the smaller-cap healthcare and BPM space.
Large-cap firms such as TCS, Infosys, HCLTech and Wipro continue to trade at relatively moderate valuations, while faster-growing mid-caps command significant premiums because of stronger AI and digital growth expectations.
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