An AI threat is causing a global sell-off in software and advertising stocks

HONG KONG – A sell-off among global data analytics, professional services and software companies deepened on Feb 3, with some investors pointing to a recently updated artificial intelligence (AI) chatbot by Anthropic as the main culprit.

AI developer Anthropic launched plug-ins for its Claude Cowork agent on Jan 30 that automate tasks across legal, sales, marketing and data analysis.

The move has sparked worries of an impending AI-fuelled disruption of the data and professional services industries, which were once seen as major beneficiaries of the AI era, according to traders and analysts.

Asian software stocks slid on Feb 4, extending a global sell-off with shares of Indian information technology companies among the worst hit. Bellwether Tata Consultancy Services sank as much as 6 per cent at the open, while Infosys dropped 6.2 per cent, tracking a slump in its US-listed shares overnight.

Elsewhere in the region, cloud-based accounting software maker Xero slid as much as 15 per cent in Sydney, Hong Kong-listed Kingsoft Cloud Holdings fell 7.6 per cent, while Japan’s Nomura Research Institute lost 10 per cent.

“Asia’s technology sector appears better positioned during this period of uncertainty, supported by its heavier weighting towards hardware, where earnings momentum remains strong,” said Mr Gary Tan, a portfolio manager at Allspring Global Investments.

Overnight on Feb 3 in the US, shares of Thomson Reuters, which owns the Westlaw legal database, plunged 15.7 per cent.

“I think Anthropic came out with some plug-ins to tackle the legal space,” said Mr Mike Archibald, a portfolio manager at AGF Investments in Toronto. “Obviously, that’s where Thomson Reuters generates a good chunk of its revenues. Sometimes the market just shoots first and asks questions later.”

Britain’s Relx and the Netherlands’ Wolters Kluwer, both providers of legal analytics services, fell 14 per cent and about 13 per cent, respectively. Relx shares have now almost halved from their peak in February 2025. The dramatic reversal highlights AI’s pressure on Europe’s software sector.

Other professional services firms also closed sharply lower. FactSet Research fell 10.5 per cent, Morningstar lost 9 per cent and LegalZoom slumped 19.7 per cent.

In London, Experian, Sage Group, London Stock Exchange Group and Pearson fell between 6 per cent and 12 per cent. Traders and analysts said investor fear often outweighed company fundamentals.

“The selling pressure in software and data analytics reflects a deepening structural debate, accelerated today by Anthropic’s legal automation tool challenging incumbents like Relx,” said Schroders analyst Jonathan McMullan.

“The speed of AI advancement makes long-term valuations harder to defend, particularly as AI tools allow businesses to do more with fewer staff, threatening the traditional model of charging per software user.”

Advertising companies were also under pressure. Shares of New York-based Omnicom dived 11.2 per cent while France’s Publicis fell more than 9 per cent after the company’s results.

Publicis, the world’s largest advertising group by market capitalisation, said it had earmarked approximately €900 million (S$1.35 billion) for acquisitions in 2026, focusing on AI-powered technologies and data assets.

Other companies that rely heavily on advertising were also hammered, with Pinterest closing the session down 5.6 per cent and Snap falling 8.4 per cent.

Mr Giuseppe Sersale, a fund manager at Anthilia, said: “AI is increasingly able to perform exactly the sort of programming and knowledge-based services that underpin these business models, so parts of the sector have been under pressure for some time.” REUTERS