NEW DELHI: Shares of India’s technology services companies rallied on bets that calls to slow the pace of artificial intelligence (AI) development will offer a reprieve for the beaten-down sector, among the earliest casualties of the AI boom.
A stock index comprising Tata Consultancy Services Ltd and Infosys Ltd jumped 2.2%, the most since Aug 28.
The rally came after the gauge lost about US$226bil in market value from its peak in December 2024 as AI developers including OpenAI and Anthropic PBC released AI models capable of upending the traditional software and outsourcing businesses.
The call for restraint on future AI development by Anthropic chief executive officer (CEO) Dario Amodei, also endorsed by OpenAI CEO Sam Altman and SpaceXAI CEO Elon Musk, will prompt short-covering in Indian tech stocks as investors bet that disruption will take longer to play out, according to analysts.
“Any narrative around regulatory restrictions on the use of AI may actually have a positive influence” on Indian IT stocks, said 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.”
Indian markets reopened Tuesday after a holiday, giving investors the first chance to react to the AI debate. — Bloomberg
