Minus nearly $1 trillion in capitalization in a week: three questions about the "software apocalypse"

A combination of disappointing corporate reports, reinforced by a release from AI startup Anthropic, made investors realize the scale of the threat from artificial intelligence and triggered a sell-off, which traders dubbed the SaaS apocalypse (or "software apocalypse"). The collapse of quotations in the software and IT services sector has continued on Wall Street for six consecutive sessions. In that time, it has wiped out about $830 billion in market value. Bloomberg explains what SaaS companies are, why artificial intelligence threatens their business and how a seemingly innocuous tool from Anthropic became a catalyst for stock market panic.

Software-as-a-Service developers provide customers with access to their applications over the Internet by charging subscription fees instead of traditional license sales. Microsoft, Salesforce, Adobe and other industry giants have built businesses on this model, providing customers with updates and support in exchange for stable payments.

In late January 2026, pressure on the sector surged after Anthropic introduced plugins to automate business tasks, fueling fears about the obsolescence of the SaaS model. Investors began dumping shares of software companies en masse, and the sell-off dragged the broad market with it.

The main threat is the potential destruction of the monetization mechanism: SaaS vendors typically charge for each user working in the system. AI agents, capable of performing tasks without human intervention, threaten to break this business model: if AI takes over some of the work done by humans, client companies will be able to buy fewer paid subscriptions to SaaS products for their employees.

In addition, there is a risk of reducing the importance of SaaS tools themselves, as new AI models are able to analyze data and manage work processes without the need for specialized software. However, not everyone agrees with the validity of these fears. Nvidia CEO Jensen Huang called the idea that artificial intelligence will destroy software developers "the most illogical thing in the world." Huang insists: AI will improve software products and needs, not replace them. "Are you going to use a screwdriver or are you going to invent a new one?" - he asked.

Anthropic has created the Claude chatbot and is positioning it as a safer competitor to ChatGPT. The company offers corporate tools for integrating AI into business processes.

A tool for lawyers that automates contract review and compliance management, released on January 30, drew particular attention on Wall Street. Although analogs already existed, it was Anthropic's product that signaled to the market that the "protective moats" of established businesses could be destroyed by more advanced AI technologies, Bloomberg states.

Analysts speculate that other specialized business capabilities will follow the tools for lawyers: Anthropic has already released plug-ins for finance, client services and other areas, The Wall Street Journal added.

This article was AI-translated and verified by a human editor