Anthropic AI fuels 'SaaSocalypse' worries, Indian IT stocks crash 6%
What's the story
Shares of leading Indian IT companies such as Infosys, Tata Consultancy Services (TCS), and Wipro have witnessed a sharp decline of up to 6%. The fall comes after US-based AI start-up Anthropic launched workplace productivity tools. The move has raised fears of intensified competition and margin pressure for software companies. This has also coincided with a wider tech sell-off on Wall Street.
Financial fallout
Anthropic plugins raises concerns for software companies
Anthropic recently launched 11 new plug-ins for its Claude Cowork agent. The tool is designed to automate tasks across legal, sales, marketing, and data analysis functions. Claude agents can now directly perform tasks that previously required interfaces from platforms like Salesforce or ServiceNow. LegalZoom's shares plunged 20%, Thomson Reuters fell over 15%, and RELX, which owns LexisNexis, dropped 14%. Jefferies called this episode a "SaaSpocalypse," indicating a shift in sentiment from "AI helps these companies" to "AI replaces these companies."
Portfolio adjustment
Jefferies reduces IT sector exposure in India model portfolio
International brokerage Jefferies has lowered its exposure to the IT sector in its latest India model portfolio rejig. The firm now has an India portfolio weight for the sector at 5.6, well below MSCI India's weight of 9.7. Jefferies's cautious approach comes amid continued foreign portfolio investor outflows, with overseas investors pulling out $34 billion from Indian equities in the last 16 months.
AI clarification
Anthropic clarifies plugin does not provide legal advice
In a bid to quell fears, Anthropic clarified that its plugin does not offer legal advice. "AI-generated analysis should be reviewed by licensed attorneys before being relied upon for legal decisions," the company said. Along with the legal-focused tool, Anthropic also unveiled a number of open-source products meant to automate various professional tasks such as sales and customer support.