European and Asian publishing and analytics stocks experienced significant declines on Wednesday, , extending a sell-off that began the previous day. The downturn was triggered by the release of new productivity tools by Anthropic, an artificial intelligence company, prompting investor concerns about disruption to existing business models.
Anthropic launched a suite of new tools for its Claude Cowork platform on Friday, . These tools are designed to automate tasks across various business functions, including legal work, marketing, and customer support. The release has unnerved investors regarding the potential impact on media and analytics businesses, leading to sharp decreases in share prices.
The London Stock Exchange Group saw a further decline of 2.5 percent on Wednesday, following a more substantial 12.8 percent fall on Tuesday. Relx, a FTSE 100 media and data company, was down 2.3 percent after shedding 14.4 percent in the prior session. Advertising companies also felt the impact, with Publicis declining another 3.3 percent on top of a 9.2 percent drop on Tuesday, and WPP falling a further 3.1 percent after an 11.8 percent decrease the day before.
“Recent months have seen a clear shift in markets from AI euphoria towards more differentiation between companies, and growing concern about its disruption to existing business models,” noted Jim Reid, head of macro research at Deutsche Bank.
The selling pressure extended to Wall Street, where a tech sell-off on Tuesday was led by analytics stocks and software groups. Gartner and S&P Global experienced significant declines, falling 20.9 percent and 11.3 percent respectively. Intuit and Equifax both declined by more than 10 percent.
Anthropic’s success with its AI-coding tool, Claude Code, launched last year, appears to be a key driver of investor anxiety. The tool reportedly reached $1 billion in revenue in just six months. The January launch of Claude Cowork, a user-friendly interface allowing access to Claude Code without requiring technical expertise, has broadened the potential for automation and further fueled concerns.
Last Friday’s release of open-source plug-ins for Cowork tools, specifically including a tool for automating contract review in legal services, highlighted the breadth of Anthropic’s ambitions and the potential for widespread disruption.
The impact wasn’t limited to European and North American markets. Several software companies listed in Asia also experienced sharp declines, including Australia’s Xero, China’s Hong Kong-listed Kingsoft Corporation, and Indian IT services groups Infosys and Tata Consultancy Services.
Despite the widespread sell-off, some analysts believe the market reaction is overly pessimistic. Marija Veitmane, head of equity research at State Street, described the market’s response as “apocalyptic” but suggested it was an overreaction. “I don’t think we can completely replace data analytics and software writing,” she said. “Of course, there is adjustment, but those companies will end up being more efficient.”
Veitmane characterized the impact of the new technology as “incremental improvement, rather than total revolution.” This suggests that while disruption is inevitable, the complete displacement of data analytics and software companies is unlikely.
The current market volatility underscores a growing investor awareness of the potential for AI to reshape industries. While the initial enthusiasm for AI has begun to moderate, concerns about its disruptive potential are intensifying, leading to a more cautious and differentiated approach to investing in the technology sector. The situation remains fluid, and further developments in AI technology and its adoption across various industries will likely continue to influence market sentiment in the coming weeks and months.
