TCS CEO on the ‘AI worry and anxiety’ that has wiped billions from stock markets globally, says: It is a … – The Times of India
Tata Consultancy Services CEO K Krithivasan has pushed back on the AI-fuelled panic sweeping through global software stocks, calling the notion that large language models will simply replace enterprise software “a far-fetched thing.” Speaking to Bloomberg, Krithivasan was direct. “Will the whole value chain be replaced by an LLM? That’s not going to happen,” he said. “It’s not that you can just go drop Anthropic in there.” His point: banks, retailers, and telecom companies sit on complex, decades-old systems that won’t be undone by a chatbot upgrade.He’s far from alone in his scepticism. Nvidia CEO Jensen Huang called the software selloff “the most illogical thing in the world.” Arm CEO Rene Haas waved it off as “micro-hysteria.” And Steven Sinofsky, the former Microsoft executive behind Windows 7 and 8, was blunter still—calling the whole narrative around software’s death “nonsense.”
A single Anthropic plugin helped trigger an $830 billion wipeout in software stocks
The pushback hasn’t slowed the sell button. What traders are calling the ‘SaaSpocalypse’—set off in large part by Anthropic’s launch of industry-specific plugins for its Claude Cowork tool in late January—has erased roughly $830 billion from the S&P 500 software and services index in just six trading sessions. Thomson Reuters cratered nearly 16% in a single session. DocuSign dropped 11%. Salesforce, Adobe, and ServiceNow all lost around 7%. A Goldman Sachs basket tracking US software stocks slid to its lowest since April—about 25% off its September peak.The collateral damage has spread well beyond SaaS. Cybersecurity stocks buckled after Anthropic unveiled a separate code security scanning tool. CrowdStrike fell 8%, Okta sank over 9%, and the Global X Cybersecurity ETF closed at levels not seen since November 2023. IBM had it worst—its stock plunged 13.2%, the steepest single-day fall in 25 years, after Anthropic claimed Claude Code could automate COBOL modernisation. That one announcement alone wiped roughly $40 billion off IBM’s market cap.
Wall Street is repricing the entire software sector on the bet that AI shrinks its addressable market
The fear isn’t really about one plugin or one tool. It’s a wholesale repricing. Anthropic’s legal plugin—at its core, a set of structured prompts—was enough to send investors fleeing from Thomson Reuters, RELX, and LegalZoom in a single afternoon. The iShares Expanded Tech-Software Sector ETF is now down over 23% for the year, tracking toward its worst quarterly drop since the 2008 financial crisis. Indian IT hasn’t been spared either—Infosys ADRs slipped 5.5%, Wipro fell nearly 5%.
The big question: does AI hollow out software companies, or eventually make them more valuable?
There’s a credible counter-argument forming. JPMorgan’s Mark Murphy called it “an illogical leap” to assume one LLM plugin could displace layers of mission-critical enterprise software. SAP CEO Christian Klein insists his company is actively winning deals because of AI. And Zoho founder Sridhar Vembu offered perhaps the sharpest take—arguing SaaS was already “ripe for consolidation” long before AI showed up, bloated by an industry that spent more on sales and marketing than on actual engineering.Wall Street, though, isn’t in the mood for nuance. As Blue Whale Growth Fund CIO Stephen Yiu summed it up: “This year is the defining year whether companies are AI winners or victims, and the key skill will be in avoiding the losers.“