Anthropic and OpenAI are the new darlings of Indian IT

On Thursday, India’s second most valuable conglomerate Tata Group announced a partnership with San Francisco-based OpenAI. As part of this partnership, Tatas will use OpenAI’s generative AI application ChatGPT’s family of tools for varying uses.

“Several thousand” employees will get access to premium versions of ChatGPT, Tata’s statement said. The partnership will also include a multi-year partnership for OpenAI to use the in-progress data centre that TCS, the group’s biggest cash cow, is building since October.

Tata’s move came two days after Infosys Ltd, India’s second-largest information technology (IT) firm after TCS, announced a similar partnership with OpenAI’s closest rival, Anthropic. On 17 February, Infosys said it will develop AI software for firms in telecommunications, financial services, and manufacturing sectors using Anthropic’s AI platform, Claude.

As part of the deal, Anthropic will set-up a centre of excellence with Infosys to build and deploy AI agents. These are systems that do more than defined tasks such as processing claims, generating and testing code, or making sales pitches.

In both the deals, both parties get their victories. TCS and Infosys, which lost over ₹2 trillion from their market cap since the start of the year due to fears of AI automating a lot of their work, get to work closely with the AI models, build services around them, and train their workforces.

For OpenAI and Anthropic, these deals could open up access to the India market at scale. While Big Tech has captured large tranches of India’s consumer market, enterprise is the next frontier for them to scale revenue and grow fast.

India’s IT sector is not a stranger to existential threats. At the turn of the millennia, the advent of enterprise resource planning (ERP) software such as SAP and Salesforce led to concerns that book-keeping and software-based accounting and ledgering tasks will go away from the sector.

During the 2010s, there was concern that the rise of cloud platforms meant IT, database management and server operations would get automated.

“Neither of these fears materialized, because at every level, you need someone to manage the services,” said Kashyap Kompella, founder and chief analyst of tech consultancy firm, RPA2AI Research. “With high levels of efficiency, India’s IT firms are experts at streamlining leapfrogs in tech adoption for most. The same is likely to happen this time as well.”

Today, all tech services firms in India have partnerships with cloud platforms and ERP firms. In fact, in December last year, TCS—in its biggest acquisition to date—splurged $700 million to acquire Coastal Cloud, a US-based Salesforce consulting firm.

Investors, too, gave these partnerships a thumbs up. Shares of TCS and Infosys jumped 2% and 1.5% after the announcements, respectively. TCS and Infosys ended last year with $30.18 billion and $19.28 billion in revenue, respectively.

Weighing the deals

Amit Chandra, vice-president at brokerage firm HDFC Securities, said there are strong upsides to the AI deals that can ensure that tech services firms are back in favour and stay on the revenue growth track.

“These partnerships are not margin dilutive for IT services companies because they are pricing the client on people, AI tools, and also the outcome. Higher offshoring, increased productivity per employee and charges for the AI technology is one way IT services companies ensure they don’t lose margins,” he said.

At the heart of these partnerships is the ability for homegrown IT services to write their code quicker and better, drastically reducing time for Fortune 500 companies.

“While AI companies need IT services companies to integrate their AI into the client’s systems, tech services providers get access to specializations and various AI tools that help them when they talk with clients,” said Chandra.

Software and AI makers feel the same. On Wednesday, Amit Zavery, president and chief operating officer of ServiceNow, told Mint in an interview that software services firms “won’t die simply because enterprises need trust to adopt technologies—they do not care about what is the outright best”.

Speaking at a press roundtable that Mint was part of, OpenAI chief Sam Altman echoed the view, stating that while the nature of software will “definitely change”, the decline in tech stocks does not necessarily mean a death knell for traditional IT outsourcers and software companies.

“I think a lot of it will change for sure. But, people overreact a lot to the positive demand (in AI), and they’ve forgotten that what makes a good software company is well beyond that software,” Altman said.

India’s $283 billion IT sector has lost $45 billion in market value this year. Much of the reaction came after OpenAI’s GPT 5.3-Codex and Anthropic’s Claude 4.6-Cowork showed abilities to automate tasks such as invoicing, legal processes and more—key business processes that TCS and Infosys handle. Shares of homegrown IT firms fell 10-14% after Anthropic’s launches.

Ashutosh Sharma, vice-president at research and advisory firm Forrester, said such partnerships happen for three reasons. “First, both tech firms and services firms serve as a GTM (go-to-market) channel to each other to get to a client opportunity. Second, IT service companies can skill their employees on the latest AI tech with early access to the tech through partnerships with these AI-native firms,” Sharma said. Lastly, IT service providers embed AI tools in their platforms and solutions that helps big tech firms drive adoption of their technologies by clients.

On 17 February, Infosys chairman Nandan Nilekani said there is a time lag between the technology that AI companies are using and the technology that large companies are prepared to integrate. He added that IT services companies can bridge that gap. “Fundamentally, this is root and branch surgery, the way business is done,” Nilekani said, describing how AI disruption is making companies re-examine their business processes.

“Modernizing of legacy systems cannot be deferred anymore. That is over,” Nilekani said, reiterating new areas of spending where the IT services firms could benefit.

Nevertheless, near-term concerns refuse to fade.

Nuvama Institutional Equities analysts Vibhor Singhal, Nikhil Choudhary and Yukti Khemani, in a 17 February note, forecast short-term headwinds continuing in Indian IT services “as revenue compression due to AI productivity will be frontloaded while benefit will accrue over medium term”. In the medium- to long-term, however, Gen AI “will create mammoth opportunity for the companies to grow”, the note said.