AI is starting to close its jaws around traditional tech from Marketplace. I'm Sabrina Beneshore, in for David Brancaccio. Software companies are in trouble, or at least their stocks are. Salesforce helps businesses with software for sales and marketing and customer service. Its stock is down 25% this year, and it is barely February.

In Tuit, they make software to help with accounting and taxes.

Their stock is down 31% this year.

And software stocks in general, according to an S&P index, are down 17%.

The reason for all of this? Artificial Intelligence.

The startup anthropic just released a new automation tool that investors fear could make many

software companies obsolete. Marketplaces Nova Sappho has more.

Organizations with a lot of operational balls in the air use enterprise software from the likes of Salesforce, Workday, ServiceNow, and others.

These are companies that are just at the heart of every business worldwide today.

That's Rishi Jaluria, managing director of software research at RBC.

Now comes Anthropics' new plugins for Claude Co-work, designed to automate

functions in sales, legal, and financial analysis, among other things, key domains for enterprise

software. Many software investors believe the actual value of the software industry is going

towards zero. Brent Thill at Jeffries analyzes tech companies.

He thinks the market's concerns are overblown, though.

You're not going to see massive banks that are regulated,

insurance companies that have the data and process workflows

are unlikely to fully rip out these systems going forward.

Consequently, software companies have time to integrate AI into their offerings.

So why then are markets reacting so negatively now to developments in agenetic AI?

Analyst Arun Chandrasekharan at Gartner Research's AI's Impacts.

I think people are just surprised by the sheer pace of innovation, I would argue, in this ecosystem,

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