Anthropic launched Claude Cowork, a new AI tool that reads files, organizes folders, and drafts documents. The release sent software stocks down on Tuesday. Investors fear AI could replace traditional software-as-a-service products.
Market Reaction and Stock Declines
According to CNN, an exchange-traded fund tracking the software industry fell 5.69% on Tuesday, its worst day since April. Thomson Reuters dropped 15.83%, its biggest single-day decline on record. Legalzoom.com sank 19.68%.
European companies also felt the impact. RELX, which owns LexisNexis, fell 14% on Tuesday. FactSet dropped 10.51%. Blue Owl shares fell 9.76%.
Thomas Shipp, head of equity research at LPL Financial, questioned why companies would pay for software if AI tools let developers build systems faster. He noted that Claude Cowork lets less technical users replace existing workflows.
Industry-Specific Concerns
Claude Cowork launched plugins for sales, finance, data marketing, and legal industries on Friday. Toni Kaplan, equity analyst at Morgan Stanley, said the product adds to fears that AI-native companies will compete with larger legal tech players like Thomson Reuters and RELX.
The sell-off raised concerns about job losses. Anthropic CEO Dario Amodei has warned AI will cause unusually painful disruption to jobs. He argues AI could displace half of all entry-level white-collar jobs in the next one to five years.
Skepticism About Long-Term Impact
Some analysts believe the reaction is overblown. Nick Dempsey, director of media equity research at Barclays, doubts general AI models can substitute for industry-specific expertise.
Aurelion Research called the sell-off sentiment driven based on AI uncertainty. The firm expects sentiment to normalize as companies see measurable returns from AI.
Last year, Chinese company DeepSeek released cheap AI models. Nvidia lost nearly 600 billion dollars in market value. A year later, DeepSeek did not cause widespread disruption. Nvidia briefly became the world’s first five trillion dollar company in October.
Thomson Reuters and Legalzoom.com rebounded slightly on Wednesday, each rising more than 1% as investors bought the dip.
