AI Startup Anthropic Shakes IT Sector, Infosys and Wipro ADRs Drop

American Depositary Receipts (ADRs) of Indian IT majors Infosys and Wipro declined this week after Anthropic, the AI startup backed by Amazon and Google, announced its entry into legal and data services automation.

Infosys ADRs slipped about 3%, while Wipro ADRs fell nearly 5% in U.S. trading. The sell-off extended to other IT consulting firms, with Accenture and Cognizant also registering losses.

Analysts noted that the declines were sharper in companies heavily exposed to legal process outsourcing (LPO) and data management contracts.   

What Happened

• Anthropic launched an AI product that automates contract review and legal briefings, raising investor concerns about disruption in IT services outsourcing.
• Infosys and Wipro ADRs fell 3–5%, extending losses from earlier in the week.
• Other IT consulting firms like Accenture and Cognizant also saw declines, with some data-focused firms dropping 9–10%.

Why It Matters

• Legal and data services are a lucrative segment for IT majors, often tied to long-term enterprise contracts.
• Anthropic’s move signals that AI-first companies are directly entering areas traditionally dominated by Indian IT service providers.
• Investors fear margin compression and reduced demand for human-led outsourcing as automation scales.

Market Context

• The sell-off coincided with broader weakness in the Nasdaq Composite, adding pressure to tech stocks.
• Indian IT equities also reflected overnight ADR declines, though some recovery was noted in domestic trading.