Mumbai: The growing dominance of artificial intelligence has begun rattling traditional cybersecurity firms, with markets reacting sharply to the launch of a powerful new AI-driven security tool in the United States. The ripple effect was visible in India on Tuesday, where cybersecurity stocks plunged by as much as 14 percent amid heightened investor anxiety.
The pressure intensified after US-based AI startup Anthropic unveiled its new tool, ‘Claude Code Security’. The company claims the system can autonomously scan large codebases, detect vulnerabilities, validate them, and even recommend fixes — functions typically performed by dedicated security teams.
Investors fear that if such advanced AI tools gain widespread adoption, demand for traditional cybersecurity services could face structural disruption.
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Sharp Decline in Indian Counters
During Tuesday’s trade, TAC Infosec Ltd shares tumbled 14.67 percent. Quick Heal Technologies declined nearly 5 percent, while TechD Cybersecurity slid more than 13 percent. Sattrix Information Security and Sasken Technologies also registered losses ranging between 2 percent and 5 percent.
Market analysts said the sell-off was driven more by global sentiment than company-specific developments. Heavy losses in US cybersecurity stocks triggered caution among domestic investors, leading to aggressive profit-booking across the segment.
Over $52 Billion in US Market Value Wiped Out
The impact was even more dramatic on Wall Street. Shares of Palo Alto Networks have fallen about 9 percent since the tool’s launch. CrowdStrike, known for endpoint protection and threat intelligence services, slumped nearly 18 percent, erasing close to $20 billion in market capitalization.
Meanwhile, Cloudflare dropped 18.5 percent, Zscaler fell 17.3 percent, and Okta declined 16.7 percent. In just two trading sessions, more than $52.6 billion in combined market value was wiped out from leading US cybersecurity firms.
What Is ‘Claude Code Security’?
According to Anthropic, its AI assistant Claude can analyze entire codebases with the depth and reasoning ability of an experienced security researcher. The tool is designed to trace data flows, understand contextual dependencies, and uncover vulnerabilities that conventional pattern-matching systems may miss.
Reports indicate that the advanced model, Claude Opus 4.6, identified more than 500 high-severity vulnerabilities — some of which had reportedly gone undetected for years.
Recently, OpenAI also introduced a benchmarking framework to evaluate how effectively AI models can detect and remediate vulnerabilities in smart contracts. In that assessment, Claude Opus 4.6 reportedly ranked at the top.
What Lies Ahead?
Experts believe the market reaction may be largely sentiment-driven in the short term. While AI-powered tools could pose competitive challenges to conventional cybersecurity providers, they may also create new opportunities for integration and innovation. Several companies are already embedding AI capabilities into their platforms.
However, near-term concerns revolve around pricing power and margins. If AI-based code scanning and automated patching prove to be significantly more efficient and cost-effective, traditional service models may face pressure.
For now, investors are watching closely to determine whether this marks a fundamental shift in the cybersecurity industry’s structure — or merely a temporary correction sparked by technological disruption.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
