Fears that agentic AI tools such as Anthropic’s Claude Cowork plug-ins could automate core enterprise processes and disrupt the traditional SaaS model triggered a sharp sell-off in global tech stocks, dragging down US software majors and wiping over ₹2 lakh crore off the market capitalisation of Indian IT firms, even as Indian industry leaders argue the impact will be evolutionary rather than disruptive in the near term.
On Tuesday, Freshworks shares closed at $9.53, down 10.6 per cent from the previous day’s close. Salesforce shares closed at $196.38, down 6.85 per cent, while ServiceNow went down by 6.97 per cent to $109.77.
Market Rout
Meanwhile, the Nifty IT index fell nearly 6 per cent, driven by rising concerns over AI’s impact after Anthropic launched new workplace productivity tools. This marked its worst performance in six years. The development also sparked a sharp overnight sell-off in US tech stocks, with spillover effects across European and Asian markets.
Palantir’s CTO Shyam Sankar, on their recent earnings call, also shared that the company’s AI-powered forward-deployed engineer (AI FDE) can reduce the time to complete “complex SAP ERP migrations” from years to as little as two weeks, which in large enterprises earlier could typically take two years. This has sparked investor concerns over the long-term viability of the SaaS business model.
Industry veteran Ashok Soota, the Chairman & Chief Mentor of Happiest Minds Technologies, noted that these developments represent a significant opportunity for the company.
“As an AI First company, we view Anthropic’s innovation as a catalyst for growth, reinforcing the role of IT services in guiding organisations through technological transformation. There is excitement around AI platforms and plugins since they drastically lower the entry barrier for creating software. However, this does not reduce the need for companies like ours and only enhances it,” he said.
He also highlighted that every major disruption, right from SaaS to cloud computing, has only expanded the role of IT services. Happiest Minds’ AI platforms act as accelerators, with value created when AI is embedded into core business processes and aligned with enterprise, regulatory, and security requirements, driving industry differentiation and customer outcomes.
Similarly, Zoho’s Chief Scientist Sridhar Vembu, in a post on X, said that though AI agents can improve software productivity, the domain knowledge and experience that SaaS companies bring are equally important. He added that the pressure on the SaaS industry started before AI due to business model inconsistencies. “An industry that spends more on sales and marketing than on engineering and product development was always vulnerable,” he said.
However, Pareekh Jain, founder and CEO of EIIR Trend, a research and forecast firm, noted that the recent sell-off was primarily triggered by concerns around global SaaS companies as agentic AI challenges the traditional seat-based, monolithic software model. With agents building and operating software quickly, investors fear SaaS will be reinvented. Anthropic’s strong performance with its legal plug-in served as a proof point, raising expectations that similar plug-ins could disrupt other enterprise functions.
Anthropic and similar players lack legacy businesses, allowing them to push agentic AI rapidly. In contrast, while legacy firms like Microsoft, Salesforce, and Indian IT services players are also developing agents alongside existing businesses, adoption and replacement will be more gradual.
“The fallout extended to Indian IT stocks because of their dependence on SaaS clients. While demand for IT services will continue—particularly for integrating evolving software, hardware, and AI stacks—pressure could emerge if SaaS spending slows or clients demand lower billing as agentic tools automate more work. Over time, enterprises may scrutinise service providers on productivity and headcount efficiency. This may force them to adapt at a quicker pace,” he said.
For now, IT services are relatively insulated, but both SaaS vendors and service providers will need to reinvent their models as agentic AI matures.
Similarly, other experts observed that Claude’s plug-ins will change the economics of SaaS and IT services. Prasad Valavade, Practice Head – Data, Analytics and AI, Apexon, noted that Claude’s plug-ins shift GenAI from assistance to execution, enabling workflow-level automation across enterprise systems.
“Claude’s impact will be incremental rather than disruptive in the near term. Plug-ins can support automation in well-defined, repeatable areas like L1 support, standardised analytics narratives, and rule-based process steps where data and decisions are predictable. Simultaneously, enterprise outcomes continue to depend on capabilities like process redesign, secure data access, system integration, and change management. These elements require thoughtful execution and operating maturity, meaning the role of IT service providers is evolving to complement AI-driven automation rather than being bypassed,” he said.
However, the plug-ins are likely to influence highly repeatable and transactional areas. Activities like documentation, basic analysis, routine support, early-stage application support, standardised reporting, testing artifacts, and back-office workflows are increasingly amenable to automation and may shift toward more in-house, AI-assisted execution over time.
With inputs from Rohan Das in Chennai
Published on February 4, 2026