Global stock markets were rattled after a US artificial intelligence firm, Anthropic, released a new set of AI tools for corporate legal teams. The announcement, made last week, led to sharp sell-offs across European legal software companies, US technology firms, and Indian IT stocks.
What Is The New Anthropic AI Tool?
Anthropic says the tool is designed to handle routine legal work such as contract checks, non-disclosure agreement reviews, legal summaries, and standard drafting tasks. It is part of the company's AI assistant Claude and functions like a plugin for in-house legal teams.
The company clarified that the tool does not give legal advice and said that lawyers must review any AI-generated content before it is used.
Investors were still worried that such tools could reduce the need for traditional legal research software and services, which led to a sharp reaction in the market.
European Legal Software Firms Take A Hit
Shares of major European legal and publishing firms RELX Plc and Wolters Kluwer NV fell by more than 10 per cent after Anthropic released its new legal automation tool on GitHub. Pearson Plc also slipped in trading.
Indian IT Stocks Slip
The impact reached Indian markets by Wednesday morning. Shares of Infosys, Tata Consultancy Services, HCLTech, Tech Mahindra, and Wipro dropped sharply, falling by as much as 6 per cent by 9:30 am.
The selling pressure came from overseas. US markets reacted overnight, and by the time trading began on Dalal Street, sentiment had already turned weak.
Stocks Fall In The US
US companies linked to legal research and software services were among the hardest hit. Shares of Thomson Reuters, LegalZoom, and London Stock Exchange Group fell by more than 12 per cent. Losses later spread across the software sector, with PayPal, Expedia Group, EPAM Systems, Equifax, and Intuit all dropping over 10 per cent.
Two S&P indices tracking software, financial data, and exchange-related stocks together lost nearly $300 billion in market value.
Market expert Art Hogan of B Riley Wealth Management told The Wall Street Journal that investors are becoming cautious about any company that could be affected by fast-moving AI developments.
“If things are advancing as rapidly as we hear from OpenAI and Anthropic, it's going to be a problem. Investors are starting to go after any of the companies that could be disrupted, which is all kinds of software application names,” Hogan said.
What This Means For Indian IT
The sell-off does not mean Indian IT is failing, but it shows investors want clear proof that companies can adapt quickly to the AI era.
Most major firms are already investing in cloud computing, automation, and AI-led services. Indian IT remains one of the country's most globally competitive industries, with strong talent, scale, and client relationships.
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