Anthropic’s new ‘Claude Cowork’ update wipes out $285B in software stocks: report

Key takeaways:

• Anthropic launched new plugins for Claude Cowork that automate legal, sales, and data analysis tasks — and investors panicked
• Software stocks saw their worst single-day drop since April, with Thomson Reuters falling 15% and Indian IT giants like Infosys dropping 7%
• The selloff spread beyond software to financial services and asset management, as markets priced in AI disruption fears for the first time

A routine product update from Anthropic turned into a market earthquake this week.
The AI company quietly launched new plugins for its Claude Cowork tool on Friday, adding automation capabilities for legal work, sales, marketing, and data analysis. By Tuesday, investors had wiped $285 billion off software, financial services, and asset management stocks.

The damage was swift and broad. A Goldman Sachs basket of US software stocks fell 6% — its biggest single-day decline since April’s tariff-driven selloff. Thomson Reuters dropped 15.8%, its worst day on record. LegalZoom sank nearly 20%. In India, Infosys fell 7.1% and Tata Consultancy Services dropped 6%. Australia’s Xero plunged 16%, its steepest decline since 2013.

The iShares Expanded Tech-Software Sector ETF has now fallen for six consecutive days and is coming off a 15% drop in January — its worst month since 2008.

What spooked the market wasn’t the tool itself, but what it represents. Unlike legal AI startups that build on top of models from companies like Anthropic, Anthropic builds the models. That gives it a unique position to disrupt both traditional software providers and the AI startups trying to replace them.

“This year is the defining year whether companies are AI winners or victims,” said Stephen Yiu, CIO of Blue Whale Growth Fund. “Until the dust settles, it’s a dangerous path to be standing in the way of AI.”

Morgan Stanley analysts called the release “a sign of intensifying competition” for Thomson Reuters and similar providers.

The selloff extended beyond software. Asset managers Ares, KKR, and TPG each fell more than 10% at one point. Apollo and Blackstone dropped as much as 8%. Business development companies saw record declines as fears of AI disruption rattled credit markets globally.

Asia’s hardware-focused tech sector showed more resilience, as chipmakers remain beneficiaries of AI investment rather than targets of disruption.

For now, Anthropic’s legal plugin comes with a caveat on its website: “All outputs should be reviewed by licensed attorneys.” Whether that reassurance holds as the technology matures is the question keeping software investors up at night.

Source Bloomberg