TCS, Infosys, HCL Tech hit 52-week low as IT stocks plunge after OpenAI launches new company

Infosys, HCL Technologies, Wipro, and TCS shares saw a significant sell-off today after OpenAI, an artificial intelligence (AI) firm announced the launch of a new company, OpenAI Deployment Company, which will help organisations to build and deploy AI systems for everyday work. All 10 constituents of NIFTY IT are trading in red, while the NIFTY IT index is down over 3.5%.

Midcap IT stocks like Coforge, Persistent Systems, and Mphasis are also trading lower today amid weak investor sentiment as OpenAI’s new firm could impact the traditional IT service delivery model. Meanwhile, IT giants like TCS, Infosys and HCL Tech also hit their 52-week low today.

ChatGPT parent company OpenAI plan to invest more than $4 billion in this new company and has partnered with 19 global investment firms, consultancies, and system integrators for this venture. Interestingly, OpenAI’s decision to launch a new company comes just weeks after Anthropic set up a $1.5 billion AI services company aimed at deploying Claude to mid-sized businesses across sectors.

OpenAI Deployment Company will be majority-owned and controlled by OpenAI, and it will use the new funding to scale its operations and acquire firms to accelerate its goal of AI deployment. TPG, Advent, Bain Capital, and Brookfield are some of the key investors.

These new companies will operate as an extension of OpenAI and Anthropic and will exclusively work to deepen their footprint in the enterprise AI market and accelerate revenue growth ahead of their IPOs.

Experts and investors are concerned that these new companies could be negative for traditional IT services companies like TCS, Infosys and others. OpenAI and Anthropic are offering end-to-end AI deployment, automation, and customisation, bypassing traditional IT outsourcing models and threatening high-margin, labour-intensive services.