Anthropic’s new AI assistant for legal teams triggered a global software sell-off, erasing $285B as investors fear automation will disrupt tech and services firms.
A new artificial intelligence tool from U.S.-based Anthropic has shaken global markets, sparking a dramatic sell-off that wiped roughly $285 billion from software, legal services, and technology stocks in a single trading session.
The rout—quickly dubbed a “SaaSpocalypse” by analysts and traders—began after Anthropic unveiled Claude Cowork, an AI assistant designed to automate routine office and legal tasks. Investors immediately interpreted the announcement as a direct threat to companies that sell research, analytics, and workflow software.
What followed was one of the sharpest one-day corrections the sector has seen in years.
What Is Claude Cowork?
On January 30, Anthropic introduced Claude Cowork, an “agentic” AI assistant aimed at non-technical professionals. Unlike traditional chatbots, the tool can perform real actions on a computer—reading files, organizing documents, drafting reports, and executing multi-step workflows with minimal supervision.
The platform launched with 11 specialized plugins that allow businesses to tailor the system to specific functions. Most were greeted with curiosity. One, however, sent shockwaves through financial markets.
The legal plugin.
Designed to automate contract reviews, NDA triage, compliance checks, and legal briefings, the plugin raised fears that AI could replace expensive legal software and even junior legal professionals. Anthropic stressed that the tool does not provide legal advice and that all outputs should be reviewed by licensed attorneys.
That disclaimer did little to calm investors.
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Why Markets Reacted So Violently
The panic reflects a deeper anxiety on Wall Street: that AI agents capable of doing real work could undermine entire categories of enterprise software.
If companies can use tools like Claude Cowork to build internal workflows and automate research, they may need fewer subscriptions to external platforms—a direct hit to the revenue models of legal-tech, analytics, and data providers.
“The jury is still out on whether AI can decimate the software industry,” CNN reported, “but investors were spooked.”
Spooked, indeed.
An exchange-traded fund tracking the software sector plunged 5.7 percent Tuesday—its worst day since April. Major legal and data firms were hit hardest: Thomson Reuters fell nearly 16 percent, LegalZoom dropped almost 20 percent, and RELX, a London-based company that owns LexisNexis, slid 14 percent.
The sell-off quickly spread beyond legal technology. FactSet tumbled more than 10 percent, DocuSign fell 11 percent, Salesforce declined nearly 7 percent, Adobe dropped 7 percent, and ServiceNow sank by a similar margin.
Even financial firms with heavy exposure to software loans were caught in the downdraft. Shares of investment firm Blue Owl Capital plunged nearly 10 percent.
Some stocks rebounded the following day as bargain hunters stepped in. But the broader message was clear: investors suddenly see AI not just as an opportunity, but as an existential threat.
A Growing Fear of AI Disruption
The episode underscores a rising concern that artificial intelligence could upend white-collar professions far sooner than expected.
Anthropic’s chief executive, Dario Amodei, has previously warned that AI may cause “unusually painful” labor disruptions, predicting that up to half of entry-level white-collar jobs could be displaced within the next five years.
Other technology leaders offer more measured forecasts, arguing that AI will augment rather than replace human workers. Yet the market reaction to Claude Cowork suggests investors are bracing for the worst.
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More Than a Single Product
Whether Anthropic’s new tool truly justifies such panic remains to be seen. The platform is still in its early stages, and legal professionals continue to emphasize the need for human oversight.
But the market’s response revealed something larger: a dawning realization that AI agents are moving from novelty to functionality—and from theory to direct competition with established businesses.
For years, investors cheered AI as a driver of software growth. Now they are confronting a more uncomfortable possibility—that AI may shrink the very industries it once promised to expand.
The sell-off may fade. The underlying fear will not.
