Mumbai, February 6: Google CEO Sundar Pichai has addressed the recent volatility in global markets, describing the sharp decline in software stocks as an "overblown" reaction to new artificial intelligence developments. Speaking during the company’s latest earnings call, Pichai dismissed the prevailing market hysteria triggered by the release of Anthropic’s Claude Cowork plugins. He maintained that AI remains an "enabling tool" rather than a destructive force, drawing parallels to how the technology has historically enhanced Google’s core products like Search and YouTube.

The market reaction, which some analysts have termed a "SaaSpocalypse," resulted in approximately USD 285 billion being wiped off the valuations of software, legal tech, and financial services companies in a single trading session. Despite the massive sell-off, Pichai suggested that companies prepared to "seize the moment" would find significant opportunities ahead, rather than obsolescence. Anthropic Claude Cowork Launch Triggers Global ‘SaaSpocalypse’ As AI Plugins Threaten Traditional Software Services: Report.

Industry Leaders Label Sell-Off Illogical

Pichai’s sentiment was echoed by Nvidia CEO Jensen Huang, who spoke at a recent Cisco event. Huang was more critical of the market's behaviour, calling the broad sell-off "the most illogical thing in the world." He argued that AI is designed to utilise existing software infrastructure rather than replace it entirely, using the analogy of a screwdriver to illustrate that the technology is a tool for efficiency.

Huang noted that Nvidia has already integrated such AI tools extensively within its internal operations. According to the CEO, this adoption has not replaced workers but has instead freed up employees to focus on high-level tasks, such as designing advanced chips and computer systems. Software executives from other firms have also defended their business models, noting that enterprise solutions involving complex data management are difficult for general AI to replicate.

The Impact of Anthropic’s Legal Plugin

The primary catalyst for the market downturn was Anthropic’s release of 11 open-source plugins for its agentic AI assistant, Claude Cowork. While most of these plugins targeted standard functions like marketing and finance, the legal-specific plugin caused the most significant alarm. This tool automates sensitive tasks including contract reviews, NDA triage, and compliance checks.

The fallout was immediate and widespread. Shares of Thomson Reuters and RELX both closed down by approximately 15 per cent, while LegalZoom saw a decline of nearly 20 per cent. The impact extended to the Indian IT sector, where Infosys ADRs fell 5.5 per cent and Wipro dropped nearly 5 per cent. Analysts at Morgan Stanley noted that the release signals intensifying competition that directly threatens established players in the professional services tech space.

Efficiency Gains and Growing AI Adoption

Beyond the legal sector, there is a growing awareness of the rapid increase in AI-driven productivity. Meta’s CFO, Susan Li, recently informed investors that the company has observed a 30 per cent year-over-year increase in engineer output due to AI coding tools, with some power users seeing boosts of up to 80 per cent. Anthropic’s own financial growth underscores this shift; its Claude Code platform reportedly reached USD 1 billion in annualised recurring revenue within months of its launch. Why IT Stocks Are Down Today? Infosys, TCS and Wipro Shares Plummet as Anthropic’s New AI Tools Spark Automation Fears.

As Anthropic reportedly seeks to raise USD 20 billion at a USD 350 billion valuation, market data suggests it is gaining significant ground in the corporate sector. Jefferies reports that enterprises now constitute 80 per cent of Anthropic’s business. While tech leaders like Pichai and Huang remain confident that market panic will subside, Wall Street remains cautious as the line between AI as a tool and AI as a replacement continues to blur.

TruLY Score by LatestLY
Rating:3

TruLY Score 3 – Believable; Needs Further Research | On a Trust Scale of 0-5 this article has scored 3 on LatestLY, this article appears believable but may need additional verification. It is based on reporting from news websites or verified journalists (TOI), but lacks supporting official confirmation. Readers are advised to treat the information as credible but continue to follow up for updates or confirmations

(The above story first appeared on LatestLY on Feb 06, 2026 11:36 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).