On Tuesday, the Nifty IT index experienced a significant decline of 3.73%, closing at 28,235—its lowest level since May 18, 2023. This drop reflects concerns over the impact of artificial intelligence (AI) on traditional IT business models, particularly following OpenAI's acquisition of consulting firm Tomoro. Major companies within the index, including Infosys, Tata Consultancy Services (TCS), and HCL Technologies, saw their shares fall between 3% and 4%. Analysts warn that OpenAI's expansion into consulting services poses a structural threat to the traditional billable-hour models that have supported the IT industry. Shashwat Singh, a fundamental analyst at Bajaj Broking, emphasized that OpenAI's new business unit could lead to Indian IT firms being sidelined as AI companies automate and deploy their technologies directly to clients. However, some analysts, such as those from Nuvama Institutional Equities, argue that the market's reaction may be overstated, noting that IT companies have reported stable earnings amid macroeconomic uncertainties. They believe that demand for AI-led transformation programs will continue to support IT deal momentum, even as conversion timelines are extended. Overall, while there are immediate concerns, generative AI could potentially expand the market for IT services significantly by the end of the decade.