As Software Stocks Slump, Investors Debate AI's Existential Threat
4 55Investors were assessing on Wednesday whether a selloff in global software stocks this week had gone too far, as they weighed if businesses could survive an existential threat posed by AI. The answer: It's unclear and will lead to volatility. From a report: After a broad selloff on Tuesday that saw the S&P 500 software and services index fall nearly 4%, the sector slipped another 1% on Wednesday. While software stocks have been under pressure in recent months as AI has gone from being a tailwind for many of these companies to investors worrying about the disruption it will cause to some sectors, the latest selloff was triggered by a new legal tool from Anthropic's Claude large language model (LLM).
The tool - a plug-in for Claude's agent for tasks across legal, sales, marketing and data analysis - underscored the push by LLMs into the so-called "application layer," where these firms are increasingly muscling into lucrative enterprise businesses for revenue they need to fund massive investments. If successful, investors worry, it could wreak havoc across a range of industries, from finance to law and coding.
4 comments
What's the problem (Score: 5, Insightful)
by bugs2squash ( 1132591 ) on Wednesday February 04, 2026 @01:16PM (#65968942)
I think they are complaining that AI might be highly effective, but I think the risk is that AI proves to be broadly ineffective and it's been a waste of so much resource.
If AI is effective and truly disruptive then it will take time, but humanity will adapt and we'll be better off for it
If it proves to be as disruptive as blockchain then we wasted a lot of carbon
Re:It's as useless as the average human (Score: 5, Informative)
by dskoll ( 99328 ) on Wednesday February 04, 2026 @01:32PM (#65968978)
The problem is, most people have learned to have a bit of healthy skepticism about what humans say and produce, whereas a lot more people accept anything an AI program says without any questioning.
Re:It's as useless as the average human (Score: 5, Insightful)
by JaredOfEuropa ( 526365 ) on Wednesday February 04, 2026 @02:24PM (#65969064)
"So, it turns out that if you can make a program that's only correct 90% of the time, you've already created a program that's correct more often than the average employee, so it's probably useful."
It depends on what you're doing with it. If you're looking for facts and look around the internet yourself, you usually get a pretty good idea of how trustworthy the source is. But an AI makes truth and the worst nonsense look and sound equally authoritative, and that's how most people take its answers.br But if you're using it as a helpdesk, it's probably fine. It's a good application of AI, as it can do both 1st and 2nd line support, and if it is able to help people 90% of the time, that's not too shabby.
Investors are kinda crazy (Score: 5, Insightful)
by MpVpRb ( 1423381 ) on Wednesday February 04, 2026 @01:55PM (#65969018)
They are a bit like fortune tellers, trying to not only predict an increasingly unpredictable future, but trying to predict what other investors will do
It's like a casino for the insane