Nifty IT index crashes as Anthropic AI tool sparks automation fears

The Nifty IT index, as well as the Indian and global IT sectors, crashed ruthlessly and the launch of new AI tools has something to dow with it.

The shares of Indian IT exporters slumped 6.3 per cent on Wednesday (February 4), mirroring a global sell-off in software stocks, after Anthropic unveiled new tools that raised concerns over potential AI-driven disruption in the data and professional services industry.

All eyes are on this newly-launched AI tool. What is it?

Anthropic's new AI tool

A few days back, on January 26, Dario Amodei, co-founder and CEO of Anthropic, wrote a long blog post about how AI is changing faster than anyone expected.

His post basically said that humanity is entering a dangerous technological adolescence. "We are on the brink of having a country of geniuses in a data center, but it’s not clear if our political or social systems are ready to handle that power without a disaster," said Amodei.

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Amodei had already warned, back in May 2025, that AI could wipe out nearly 50 of entry-level white-collar jobs in the next five years, pushing unemployment up to anywhere between 10 per cent and 20 per cent.

And just four days after the January 26th post, Anthropic launched a new plugin tool under its Claude Cowork setup, designed to automate functions in legal, sales, marketing, and data analysis — and that’s when things really started shaking up.

IT shares hit

Thomson Reuters's shares dropped 15–19 per cent, LegalZoom dipped 18–20 per cent, and Gartner fell more than 20 per cent.

Reports said legal tech firms took up to a 25 per cent beating. Shares of Indian IT majors Infosys and Wipro — both listed on Wall Street — also fell around 7 per cent in overnight trade. The sell-off came right after Anthropic rolled out a new productivity tool targeted at in-house legal teams. And since it’s now a global ripple effect, the Indian IT sector got hit too.

Nifty IT fell 7 per cent, with all big names TCS, Infosys, Wipro, HCL, and Tech Mahindra bleeding red. Infosys suffered the most, crashing nearly 8 per cent.

Indian market investors had just begun breathing easy after almost two years, thanks to the recent US-India trade deal. People are yet to figure out if that deal truly benefits India or plays into US interests, but before that debate could even settle, another jolt struck the markets.

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And this time, it hurt badly especially for those holding IT portfolios. From large caps to micro caps, almost all IT stocks are floating in deep red.

What Anthropic’s Claude Legal Plugin does

Anthropic’s Claude Legal Plugin, launched on January 30, 2026, automates regular legal work for in-house teams on its Claude Cowork platform.

It handles contract reviews, NDA checks, compliance tracking, and legal briefings — all customised as per company’s internal processes and risk limits. The plugin is part of a broader suite called Claude Cowork, which bundles multiple tools and AI agents to automate specific workflows.

By taking over basic legal research, document review, and compliance tasks, the plugin has shaken up legal tech stocks across the board.

Claude Cowork already supports IT-related work through tools like Productivity , Enterprise Search , and even Customer Support modules. In short, it lets teams build their own in-house virtual IT specialists, trimming down manual grunt work in support, admin, and basic operations.

India impact

Anthropic’s advanced AI systems also threaten entry‑level talent pool at Indian IT firms by replacing routine development and testing tasks.

Besides sparking off a sharp selloff in U.S. and European software and data analytics stocks, worries have intensified in India’s $283 billion IT industry, which remains heavily dependent on large-scale workforces to deliver client projects.

The question experts are asking is will this stop here? Probably, only AI knows.