Software stocks fall on AI disruption fears after Anthropic

Global software stocks extended losses for a second day as investors reacted to growing concerns that rapid advances in artificial intelligence could disrupt traditional software business models.

European software, data analytics and professional services companies were among the hardest hit, following similar declines in technology stocks across global markets. The selloff intensified after Anthropic introduced a new legal-focused artificial intelligence model, reinforcing investor fears about how quickly AI could reshape parts of the software industry, News.Az reports, citing Reuters.

Shares of major European analytics providers fell notably in early trading. The London Stock Exchange Group also dropped sharply, extending losses from the previous session. In Asia, technology stocks were also under pressure, with several major Japanese software and systems companies posting significant declines, contributing to broader market weakness.

The selloff comes amid rising concerns that parts of the technology sector could be experiencing an AI-driven bubble. Financial institutions and policymakers have increasingly warned that rapid investor enthusiasm for AI could lead to volatility if growth expectations are not met.

Analysts say investor worries go beyond short-term earnings forecasts. Instead, concerns are focused on longer-term risks, including competition from companies built entirely around AI technology, as well as businesses developing their own AI tools internally rather than relying on traditional software providers.

One key trigger behind the latest market reaction was the launch of a legal-focused AI plugin for Anthropic’s Claude generative AI platform. The development highlighted how AI could automate complex professional tasks that were previously handled by specialized software and service providers.

The impact has also spread beyond software firms. Advertising companies, seen as highly exposed to AI-driven automation, also faced selling pressure as investors reassessed future revenue models in the sector.

Despite the market reaction, AI-related stocks linked to chip manufacturing and cloud infrastructure have continued to perform strongly. Major technology firms investing heavily in AI infrastructure have helped push U.S. markets to record highs, highlighting a growing divide within the technology sector between companies building AI infrastructure and those potentially disrupted by it.

Market experts say the current environment reflects a broader transition phase in the technology industry. While AI is expected to drive long-term productivity gains and innovation, it is also likely to reshape business models, forcing some companies to adapt quickly or risk losing market share.

Investors are expected to continue closely monitoring AI developments, regulatory responses and corporate strategies as the technology continues to evolve and reshape the global technology landscape.

News.Az 

By Aysel Mammadzada