By Dan Gallagher
This is an online excerpt of the weekly AI & Business newsletter. Get more insights in your inbox each week by signing up here.
Imagine being a CEO who can simply tell an AI bot how to handle your company's human-resource, sales, customer tracking and other back-office functions. Would you still pay a software vendor millions of dollars a year for those services?
That dream is actually nowhere near reality, at least for any company of size and scale. But the mere possibility has been enough to cast a dark cloud over the companies that make and sell enterprise software to businesses.
Shares of Salesforce, ServiceNow and Adobe all lost more than 20% of their value in 2025 while Workday dropped about 17%. Two-thirds of the stocks on the IGV Software Index closed last year in the red versus a 20% gain for the Nasdaq composite.
Anthropic's release of Claude Cowork last week added more fuel to that fire.
The tool is designed to make it easier for workers who aren't software engineers to use the company's Claude Code chatbot to automate work functions, like reviewing emails and organizing computer files. Anthropic added that it built Cowork in less than two weeks using Claude Code, driving home the idea that AI chatbots can help companies do a lot more with a lot less. The IGV index has dropped another 9% since Anthropic's announcement.
The latest news shows Anthropic wisely leaning into its strengths. Claude is considered a top-notch tool for software coding. The company's focus on building AI tools for enterprises potentially gives it a more stable business model than ChatGPT owner OpenAI.
But replacing highly complex business software platforms with AI chatbots is easier said than done. Such software is generally mission critical and leans heavily on proprietary data that is often governed by confidentiality rules and privacy laws.
"Tools like Claude Cowork and ChatGPT are great for research, search, and more general personal productivity, but are unlikely to replace sophisticated enterprise systems where data scale and quality, platform breadth, human-AI workflow integration, distribution, and trust are critical," William Blair software analyst Arjun Bhatia wrote following the Cowork unveiling.
The trick for software companies will be dispelling fears of AI disruption at a time when corporate tech budgets are coming under pressure from a variety of points, including the need to invest more in AI research. Widespread workforce reductions also reduce the number of "seats" that companies need from their software vendors. This is an additional drag on revenue growth.
AI may not be killing software companies, but the belief that it someday will may prove persistent.
This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).
(END) Dow Jones Newswires
January 20, 2026 13:00 ET (18:00 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments