🟢 The AI bubble eats incumbent software giants
While we were waiting for an AI bubble burst, in two brutal sessions, the market ended up punishing the old digital economy for a different fear: that AI was about to replace parts of its business model sooner than expected.
Software companies' valuations went down by almost $1 trillion over seven days, and the shockwave spilling from equities into credit (over $17.7B of US tech-company loans sliding to distressed levels). Ouch.
Brody Ford
Ouch.
What triggered this slide is simply Anthropic releasing an AI legal-work tool (contract review, etc.) that is anything but a game-changer on its own, but the market read it as a signal of generalizable substitution: today legal; tomorrow sales, marketing, finance. AI Companies themselves are not safe. They're still straining with higher-than-expected capital expenditures, some of them already guiding below expectations, so you know that another rout is on the horizon...
And this is the current paradox:
