New Delhi: Indian information technology stocks rose sharply on Tuesday after leading artificial intelligence executives called for a slower pace of development of advanced AI systems, easing some investor concerns about the threat that rapidly improving technology could disrupt the traditional IT services business.
The Nifty IT index rose as much as 5.2 percent during the session, its strongest performance since July 2. The index has fallen about 21 percent so far this year, more than twice the decline of the broader Nifty 50.
HCLTech led the gains, rising 6.21 percent after eight consecutive sessions of losses. Infosys gained 4.72 percent and Tata Consultancy Services rose 4.76 percent.
The rally followed growing debate among leading AI executives about the risks of developing increasingly powerful AI systems too quickly.
Anthropic chief executive Dario Amodei called for a slower pace of progress in advanced AI development. In an essay published on September 12, he argued that more time was needed to strengthen safety measures as AI capabilities advance rapidly.
Amodei has warned about the risks associated with increasingly capable AI systems and the possibility of serious harm if their development moves faster than efforts to manage those risks.
OpenAI chief executive Sam Altman has backed Amodei's call to pace the development of advanced AI. Elon Musk, who leads xAI, has also expressed support for Amodei's position.
The warnings have intensified a wider debate about the speed of AI development. Earlier this month, Anthropic researcher Jacob Coxon resigned and publicly raised concerns about the risks associated with increasingly capable AI systems.
The debate is particularly important for India's IT industry, which is worth about $315 billion and provides software development, technology support and other services to clients around the world.
Indian IT companies have faced growing pressure as AI tools become capable of performing some software related tasks. Faster improvements in AI could allow companies to complete more work with fewer human hours, putting pressure on traditional revenue models.
The latest calls for greater caution could give Indian IT companies more time to adjust their businesses and respond to changes in demand for AI related services. Many companies are already changing their business models as they respond to the growing use of AI.
Piyush Pandey of Centrum Broking described the market movement as a tactical bounce rather than evidence of a fundamental improvement in the sector's outlook. The longer term impact of AI on Indian IT companies remains uncertain.
The latest market move also came after a mixed session for technology stocks globally. AI linked stocks fell in several markets on Monday after concerns about the risks of rapid AI development weighed on investor confidence, while global software stocks gained.
At the same time, the wider Indian stock market faced pressure from elevated oil prices and global bond yields ahead of this week's US Federal Reserve meeting. The contrasting performance underlined the strength of the move in IT stocks compared with the broader market.
The calls from AI executives do not amount to an agreement by the global AI industry to stop or freeze development. Instead, they have added to the debate over how quickly advanced AI systems should be developed and how their risks should be managed.
For India, the debate presents both risks and opportunities. A slower pace of frontier AI development could give established IT companies more time to adapt, while continued AI adoption could create new demand for technology services.
The latest stock market rally therefore appears to reflect a change in investor expectations rather than proof that the AI threat to traditional IT services has disappeared. The longer term direction of Indian IT stocks will depend on how quickly AI capabilities advance, how businesses adopt the technology and how successfully Indian companies adapt.