- Shares of Indian IT firms dropped sharply after Anthropic launched an AI legal automation tool
- Nifty IT index fell up to 6% in early trade, with major companies losing over 5% value
- Anthropic’s tool automates contract review and legal briefings, requiring attorney oversight
Shares of all Indian information companies tanked during early trade on Wednesday after Anthropic PBC released new artificial intelligence automation tool that sparked fears it could eat into the core businesses of data and information services firms.
The Nifty IT index shed as much as 6% after opening bell. LTIMindtree Ltd. and Persistent Systems Ltd. dropped over 6% while HCLTech Ltd., Infosys Ltd. and Wipro Ltd. declined over 5%.
Anthropic included a legal tool on its website that it says it can automate work like contract reviewing and legal briefings. “All outputs should be reviewed by licensed attorneys,” according to the website.
The development triggered a sharp rout in US and European data analytics, professional services and software stocks with big names like Accenture Plc. and Cognizant Technology Solutions Corp. shedding over 9% on Tuesday. The tech-heavy Nasdaq 100 Index fell as much as 2.4% at one point before trimming losses to close 1.6% lower.
Anthropic, founded in 2021 by former members of OpenAI, is part of a rash of AI startups developing tools for the legal industry. The company's AI coding tool, Claude Code, was publicly launched only in May last year and reached $1 billion in annualised recurring revenue by November, as per reports.
Investors have been pouring money into AI products for the legal industry for more than two years now. Indian IT companies also cater to this sector, besides BFSI and commiunications.
ALSO READ: Wipro, Infosys ADR Drops After Anthropic's Move Into Legal, Data Services
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