Why A.I. Fears Are Battering Stocks, Again

Investors have been fleeing software stocks after A.I. companies like Anthropic introduced more sophisticated business tools, sending shares down in Asia, Europe and on Wall Street. The market lost about $300 billion in value after the release of A.I.-driven automation tools that can handle some legal, marketing and customer-service tasks.

The sell-off hit providers and incumbents alike: Thomson Reuters fell almost 16 percent, LegalZoom lost nearly 20 percent, a JPMorgan index that tracks U.S. software stocks dropped 7 percent, and Infosys was down about 7 percent. Analysts and investors worry that model makers entering services will let companies pare down software subscriptions and program their own processes.

A.I. start-ups in legal services have already pressured incumbents, and more than 50 investors told JPMorgan they have been reducing their exposure to software stocks. There is a counterargument from industry leaders who say firms will continue to rely on existing software tools rather than rebuild them from scratch.

anthropic, a.i.-driven automation tools, software stocks, thomson reuters, legalzoom, jpmorgan index, infosys, legal services, software subscriptions, investors reducing exposure