The Nifty IT index in Mumbai plunged 3.7% to close at 28,234.9, its lowest level in three years, following OpenAI's announcement of a new venture with over $4 billion in investments aimed at accelerating AI adoption. This development has unsettled investors, particularly as Indian IT firms had been banking on AI service implementations to drive growth. Notably, all ten constituents of the Nifty IT index fell, with LTM down 4.8% and Tech Mahindra and Persistent Systems dropping nearly 4.5% each. Analysts suggest that the traditional software service business models of Indian IT companies are under threat from the rise of AI-led firms. The outlook for IT stocks remains uncertain, with existing challenges compounded by the new pressures from AI advancements, potentially jeopardizing earnings trajectories. However, midcap IT firms that primarily serve the banking, financial services, and insurance (BFSI) sectors, like Coforge and Mphasis, are viewed as potential opportunities once the market stabilizes.