Shares of Indian IT companies surged up to 6% on Tuesday after OpenAI and Anthropic leaders called for a slowdown in AI development to manage risks and protect humanity, boosting sentiment for the tech stocks on Dalal Street.
Infosys, HCLTech, LTI Mindtree and Mphasis shares jumped around 6% each, while TCS and Tech Mahindra shares gained more than 5%. Persistent Systems, Wipro, OFSS and Coforge shares gained 2-4%. The sharp surge in IT stocks pushed the Nifty IT index around 5% higher on Tuesday morning, leading gains among the sectors.
Anthropic CEO Dario Amodei in a long X post on Saturday, called on AI companies to slow the rate at which they advance model capabilities amid mounting fears of misuse of artificial intelligence. The Anthropic CEO wrote that in nearly a year, AI agents "could be capable of taking over the entire internet, potentially causing hundreds of billions of dollars in damage."
blockquote class="twitter-tweet"p lang="en" dir="ltr"We Must Pace the Frontier: I’ve written a new essay on why the AI industry should slow down, with a three-part plan for doing so.br/br/Anthropic is unilaterally committing to the first of these steps. We’ll provide third-party evaluators with permanent, employee-level access to our…/p— Dario Amodei (@DarioAmodei) a href="https://x.com/DarioAmodei/status/2098773920774074715?ref_src=twsrc%5Etfw"September 12, 2026/a/blockquote script async="" src="https://platform.x.com/widgets.js" charset="utf-8"/script
World’s richest man Elon Musk, who runs xAI, as well as OpenAI CEO Sam Altman said that they agree with Amodei. “Dario is right…I have been sounding the alarm on AI for a long time,” Musk said in a streak of posts.
OpenAI CEO Sam Altman in a series of posts noted that AI companies should pace the AI frontier, and that this has been the primary topic of discussions at the ChatGPT-maker in the recent weeks. “There are two ways AI progress could go very badly and that we must avoid. First, we could lose control of the future to AI…Second, we could end up in a world with too much concentration of power…Avoiding these two threats requires walking a narrow middle path; for example, one country could gain too much power. Another example is one lab ending up with too much power,” he wrote.
blockquote class="twitter-tweet"p lang="en" dir="ltr"There are two ways AI progress could go very badly and that we must avoid.br/br/First, we could lose control of the future to AI. This is unacceptable; we are unapologetically on Team Humanity, and AI must always serve people. To ensure that, we need ways to ensure that alignment and… a href="https://t.co/GK7XcoOh3v"https://t.co/GK7XcoOh3v/a/p— Sam Altman (@sama) a href="https://x.com/sama/status/2099352016988614852?ref_src=twsrc%5Etfw"September 14, 2026/a/blockquote script async="" src="https://platform.x.com/widgets.js" charset="utf-8"/script
HSBC earlier this year said India can serve as an “anti-AI” diversifier as sharp swings in technology-exposed markets encourage foreign investors to broaden their portfolios. HSBC strategists Prerna Garg, Herald van der Linde and Yogesh Aggarwal said in a report that AI-rotation outflows from India have “largely played out.”
“Any narrative around regulatory restrictions on the use of AI may actually have a positive influence” on Indian IT stocks, Bloomberg quoted Deven Choksey, managing director at investment advisory firm DRChoksey FinServ. “When the narrative shifts from unchecked development to regulated and responsible use of AI, short-covering backed by fresh buying in frontline IT stocks is quite possible,” he added.
Also read | AI restraint debate lifts outlook for India tech services stocks
Why caution is warranted?
While the AI selloff is boosting sentiment for IT stocks, caution still prevails. The benchmark 10-year U.S. Treasury yields climbed above 5% on Monday, the highest level since October 2023. This comes as traders may have priced in the possibility that the US Federal Reserve will have to keep interest rates higher for longer, as soaring oil prices revived fears of renewed inflation pressure.
The Federal Reserve is all set to announce the outcome of their FOMC meeting on Wednesday. The American central bank will likely raise its interest rate this week, and deliver at least one more hike by the end of March, according to a majority of economists polled by Reuters. This comes as price pressures have already been running well above the American central bank's 2% annual target.
The Fed rate hike expectations intensified after inflation data released on Friday showed that US consumer price inflation excluding energy and food, a key measure of underlying inflation, rose 0.3% last month from the previous month.
The Indian IT companies derive a major portion of their revenue from their US clients. Hence, higher US interest rates and subsequently lower discretionary spending expectations often spook IT investors.
Also read | BofA turns bullish on Nifty, forecasts 12% upside by December
Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.
