The global IT and software sector saw a massive sell-off in the last 24 hours. Nearly $300 billion in market value was wiped out. This did not happen because of weak earnings or bad economic data. It happened because investors realised that AI is no longer just a tool. It is now a direct competitor to IT companies.
This triggered after Anthropic rolled out enterprise-grade plugins for its Claude AI. These plugins are designed to automate real business work. This includes legal checks, compliance tasks, internal research, and enterprise workflows. These are the same areas where IT services and software companies make a large part of their money.
Soon after this, the market reacted, and the Nasdaq fell by over 2 percent during the session. Software and IT stocks across the US, Europe, and Asia saw heavy selling.
Until now, AI has been seen as a productivity feature. It helped employees work faster. But this is now changing. Tools like Claude can take over entire workflows. This shows that AI can now start replacing work instead of supporting it. So, several business models are now under pressure.
Many analysts see this share market incident as a structural repricing. Valuations were based on the assumption that human-led services would continue to grow. Now, AI has forced investors to question their assumptions. If AI can deliver similar output faster and cheaper, clients will renegotiate contracts or move away altogether.
The impact on the Indian IT sector could be serious in the long run. Indian IT companies are heavily dependent on service-based revenue. Much of this revenue comes from large teams handling repetitive enterprise tasks for global clients. If AI automates these tasks, the need for large teams reduces.
In the short term, Indian IT firms may still see stable demand. Many enterprises will take time to adopt AI fully. But over the next five to ten years, pricing pressure is likely to increase. Margins could shrink. Growth rates may slow unless companies reinvent their offerings.
This also raises concerns for IT engineers. Entry-level and mid-level roles that involve routine work are the most exposed. Tasks like testing, basic development, documentation, support, and internal research are already being automated. This does not mean jobs will disappear overnight, but the nature of work will change fast. And developers who adapt soon will stay.
To stay safe, IT professionals need to adapt. Learning only one programming language will not be enough. Engineers should focus on system design, cloud architecture, security, AI integration, and problem-solving roles that require human judgment. Understanding how AI tools work and how to deploy them will be critical.
Soft skills will also matter more. Communication, business understanding, and decision-making will help engineers move into roles where AI supports them instead of replacing them. Those who treat AI as a threat will struggle. Those who learn to work with it will stay relevant
This sell-off is a warning for many IT companies. Now that AI is entering core enterprise operations, they have to do something to keep their business model safe. Companies still have time to respond, but they cannot ignore this. The next phase will reward companies and professionals who move early. AI is not coming. It is already here.
