AI Advances Prompt Stock Declines and Contract Renegotiations in IT Services Sector

The rise of large language model platforms like Anthropic, OpenAI, and Google Gemini is prompting a significant shift in the global IT services industry. Major IT firms such as Accenture, IBM, TCS, Infosys, and Wipro have seen stock declines of 20-30%, reflecting market concerns over AI's impact on traditional service models. According to a Kotak report, while deal signings remain stable, clients are increasingly renegotiating contracts to factor in AI-driven productivity gains, leading to rate pressures and tighter scopes. The long-term effects of AI on IT services revenue and client relationships remain uncertain, with cautious client approaches and evolving AI adoption shaping the sector's future.