Software under threat: how AI is changing market expectations
4 February 15:29
On Tuesday, February 3, shares of technology and software companies fell sharply on global stock markets. Investors began selling securities en masse after news of rapid progress in the field of artificial intelligence, which, in their opinion, could undermine the business models of traditional software developers.
This was reported by The Wall Street Journal, according to "Komersant Ukrainian".
According to the publication, the catalyst for the decline was a statement by the startup Anthropic about expanding the functionality of its AI assistant Claude, particularly in the legal analytics and document preparation segment. This heightened fears that AI tools could directly replace commercial software products.
Which companies were the first to suffer
The biggest decline was recorded in the legal and financial information services sector. Shares in Thomson Reuters, LegalZoom, and London Stock Exchange Group lost more than 12% in a single trading session.
Subsequently, the wave of sell-offs spread to the broader software market. Shares in PayPal, Expedia Group, EPAM Systems, Equifax, and Intuit fell by more than 10%.
The two S&P stock indices that track software and financial analytics companies lost a combined $300 billion in market capitalization.
Overall market reaction
Amid the sell-off:
- The Nasdaq Composite fell 1.4%;
- The S&P 500 fell 0.8%;
- The Dow Jones, which is less dependent on the technology sector, lost about 0.3%.
Large investment funds that actively invested in software companies also felt the pressure. Shares of Ares Management, KKR, and Blue Owl Capital fell by more than 9%, while Apollo Global Management and Blackstone lost more than 4.5%.
Why AI caused panic
The current market reaction is not only related to specific statements by individual companies, but also to a broader fear of technological replacement.
“If AI is really developing as quickly as OpenAI and Anthropic claim, it becomes a serious problem. Investors are starting to get rid of any companies that may be at risk, which is practically the entire software market,” explained Art Hogan, strategist at B. Riley Wealth Management.
Despite assurances from software companies that their value lies not only in code, but in data ecosystems, integrations, and customer trust, investor nervousness continues.
The software sector, which for years has been considered one of the most reliable for investors, now faces a new type of risk — the risk of being displaced by technology, rather than cyclical downturns or regulatory pressure.
Against this backdrop, large American companies are already announcing massive staff cuts.
