On Feb. 2, Anthropic announced a new feature for its Claude Cowork AI software: a simple plug-in to help users perform legal tasks such as reviewing contracts or crafting nondisclosure agreements. At first glance, the news hardly seemed earth-shattering, but it shook financial markets to their foundations: Investors wiped $285 billion off the market value of tech stocks in the 24 hours after the tool debuted, with software vendors particularly hard-hit. Over the following weeks, the rout continued and even inspired a new term—the “SaaSpocalypse,” which refers to the software-as-a-service business model common to business software vendors today. (Software stocks have recovered some of their losses but at press time were about 8% below levels at the end of January.)
To many investors, the logic is simple: AI models, such as Anthropic’s Claude, will eliminate the need for specialized business software. Companies will just ask AI to perform the tasks currently handled by other vendors’ software, or they will ask AI coding agents from Anthropic, OpenAI, or Google, to “vibe code” bespoke software tailored to their needs. Either way, businesses will no longer need to buy expensive software from traditional vendors like Salesforce, ServiceNow, and Microsoft, or from the hundreds of smaller, niche firms offering legal tech, procurement systems, or financial planning software.
