Is Anthropic signaling the end of traditional software? That question has been circulating this week as the artificial intelligence company has rattled established players in the enterprise software space.
Shares of industry stalwarts like Salesforce, Workday, Adobe, Oracle, and SAP have fallen as Anthropic unveils new capabilities with its AI system, Claude Cowork. The updates pose a potential challenge to the core business of traditional software companies, with its algorithms capable of generating complex workflows that have long been the domain of these large corporations.
Software Sector Under Pressure, But Not Necessarily in Decline
The impact of Anthropic’s advancements extends beyond software companies. Stocks of legal research firms like Thomson Reuters and LexisNexis, as well as companies in data analytics and finance, have also experienced declines. The recent surge in attention surrounding Anthropic’s models represents “the most important moment in the AI industry since the launch of artificial intelligence. It is infinitely interesting,” according to Dean Ball, a researcher at the American Innovation Foundation, as reported in The Wall Street Journal.
However, not everyone in the AI industry shares this view. Nvidia CEO Jensen Huang recently argued against the notion of a software industry decline. “There’s this notion that the software industry is in decline and is going to be replaced by AI. That’s the most illogical thing in the world,” Huang stated during a public appearance on Wednesday. He believes established companies can continue to offer specialized products, leveraging their experience and extensive data holdings.
Jacinto Estrecha, head of AI for Europe and Latin America at consulting firm NTT Data, echoed this sentiment from Barcelona. “The advances in AI, beyond these launches from Anthropic, will represent a change in the production model and the business formula of software companies, but that will not mean their disappearance, because these traditional companies can continue to offer high-value-added services to businesses,” he explained.
A Race, Not a Revolution
Estrecha views the situation as a long-term evolution, not an immediate revolution. “With an industry that is advancing so quickly, what is on the crest of the wave one week may not be there a month later,” he cautioned. He also noted that Anthropic is already collaborating with traditional industry players, including Salesforce through its Agentforce 360 application, as well as Accenture, IBM, and Deloitte.
Anthropic has attracted significant investment from tech giants Amazon and Alphabet (Google), both of which have substantial software development divisions, with billions of dollars poured into the business.
Ethical AI and Copyright Concerns
Anthropic aims to differentiate itself through a more ethical and secure approach to AI. Founder Dario Amodei left OpenAI due to disagreements with Sam Altman specifically on this point. Amodei is championing a “Constitutional AI” model, where the AI learns to judge and correct its own behavior based on a pre-defined code of conduct.
However, this commitment to ethical practices has faced challenges. Anthropic recently reached a historic agreement to pay $1.5 billion to a group of authors and publishers in the United States, acknowledging that it had violated their copyrights in training its algorithms.
The current market reaction highlights the growing anxiety within the software industry regarding the potential disruption caused by AI. While the long-term impact remains uncertain, the events of this week demonstrate that Anthropic has quickly become a force to be reckoned with, forcing established companies to reassess their strategies and consider how they will adapt to a rapidly evolving technological landscape.
