IT Services

    OpenAI Enters Consulting Arena, and India's IT Stocks are Paying the Price

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    OpenAI Enters Consulting Arena, and India's IT Stocks are Paying the Price

    After Indian information technology (IT) stocks took a beating when Anthropic announced an enterprise-focused joint venture, they again came under severe selling pressure on Tuesday, May 12, after OpenAI launched the OpenAI Deployment Company.

    TCS, Infosys, and HCLTech all touched their 52-week lows during the session.

    The majority-owned OpenAI subsidiary is backed by more than $4 billion in initial capital. It is designed to embed specialised engineers into client organisations to build and deploy AI systems at scale.

    Dalal Street views it as a direct challenge to the business model that has sustained India's largest IT companies for three decades: providing human expertise to manage complex enterprise technology operations.

    The Nifty IT index, which tracks 10 major Indian technology stocks, plunged by 3.7%. The damage was broad-based, with all constituents in the red. This includes stocks like Infosys, TCS, Tech Mahindra, HCL Tech, Wipro, Persistent Systems, and Coforge. 

    “If the AI trade that is going on in the rest of the developed markets goes on at the same pace, which I think will do for a couple of months, IT stocks won't see any good days in the coming next couple of months at least,” Rishab Khandelwal, Founder and CEO at Sabiduria Capital, tells AIM.

    Further, he notes that foreign Institutional Investors (​FIIs) have dumped IT stocks significantly over the last few weeks, especially following the announcements of Q4 FY26 results of IT giants.

    The Enterprise Shock

    The OpenAI Deployment Company, or DeployCo, represents a fundamental strategic opportunity for the ChatGPT maker. Rather than simply selling model access through Application Programming Interfaces (APIs) and software subscriptions, OpenAI will now directly dispatch specialised engineers into client organisations to redesign workflows, connect AI to core business data, and build production-ready systems.

    “The OpenAI Deployment Company will extend OpenAI’s ability to embed engineers specialised in frontier AI deployment, known as Forward Deployed Engineers, or FDEs, into organisations working on complex problems in demanding environments,” OpenAI said in a blog post. “These FDEs will work closely with business leaders, operators, and frontline teams to identify where AI can make the biggest impact, redesign organisational infrastructure and critical workflows around it, and turn those gains into durable systems.”

    The venture, launched with more than $4 billion in committed capital, is backed by a consortium of 19 leading global investment firms, consultancies, and system integrators. The partnership is led by private equity giant TPG, with Advent, Bain Capital, and Brookfield as co-lead founding partners. Notably, Goldman Sachs and SoftBank Corp, which are among the backers, are also traditional competitors and partners of India's IT sector.

    To staff DeployCo, OpenAI will acquire Tomoro, a UK-based applied AI consulting and engineering firm. The deal will bring approximately 150 experienced FDEs and deployment specialists into the new unit.

    In lock step, Anthropic had also joined forces with firms like Blackstone, Hellman & Friedman, and Goldman Sachs to launch a similar new $1.5 billion joint venture to help businesses integrate Claude into core operations, the companies announced on May 4.

    “I think it's very important for these IT services companies to be very thick with some of these platform companies, because the capabilities are getting unleashed from these platforms,” Praveen Bhadada, CEO and MD of consulting firm Neovay Global, earlier told AIM. 

    “It's in their interest for services companies to know these capabilities and then leverage them for a three-part transformation—protect your current business, launch newer services, and then drive towards outcomes,” he added. 

    For India's IT majors, the threat is both structural and immediate. 

    The sector's outsourcing model is built on supplying skilled labour to manage, customise, and maintain technology infrastructure for global enterprises. OpenAI's move signals that AI is not merely a tool these firms can integrate into their offerings; it is now arriving as a direct competitor, backed by billions in private equity.

    Investor anxiety is not new. The Nifty IT index has fallen over 25% year-to-date, weighed down by slowing client discretionary spending, a weakening rupee, and rising fears over AI-led automation of the volume-based services that generate significant revenues for TCS, Infosys, and HCLTech.