A massive selloff hit global software stocks in early February 2026 after AI developer Anthropic released new automation tools, wiping out nearly 285 billion dollars in market value across software, financial services, and asset management sectors. The market panic sparked fierce debate about whether artificial intelligence will replace traditional software companies or simply become another tool in the developer’s kit.
The selloff began after Anthropic released 11 open-source plugins for its Claude Cowork tool in late January. Claude Cowork functions as a virtual assistant capable of reading files, organizing directories, and composing documents on behalf of users. The company also rolled out specialized plugins aimed at sectors including sales, finance, data marketing, and legal services. A Goldman Sachs basket of United States software stocks sank six percent on the day, marking its biggest one-day decline since a tariff-fueled selloff in April 2025.
Tech Leaders Push Back Against Replacement Fears
Nvidia CEO Jensen Huang called the selloff illogical during an appearance at a Cisco Systems event in San Francisco. He argued that software products are tools and artificial intelligence will use those tools rather than reinvent them. Huang compared the situation to someone choosing between using a screwdriver or inventing a new screwdriver, emphasizing that AI will continue to rely on existing software rather than rebuild basic tools from scratch.
OpenAI CEO Sam Altman also weighed in during the Cisco AI Summit in San Francisco, discussing the viral AI social network Moltbook where AI-powered bots appear to exchange code and discuss their human creators. While Altman dismissed Moltbook as a likely fad, he acknowledged that the underlying technology enabling bots to operate autonomously offers a glimpse of the future. Altman noted that Codex, OpenAI’s AI-assisted coding tool, saw over a million developers use it in the past month. On the same day, OpenAI introduced a standalone application for Codex designed for Apple’s macOS to compete more aggressively with other tools like Claude Code and Cursor, which have fueled a surge in AI-assisted coding known as vibe-coding.
Global Markets Feel the Impact
The stock market impact extended beyond the United States. Shares of Indian IT exporters slumped 6.3 percent, with tech services firm Infosys plunging 7.3 percent. China’s CSI Software Services Index fell three percent, while shares of software company Kingdee International Software Group in Hong Kong tumbled more than 13 percent. In Japan, staffing firm Recruit and Nomura Research saw their shares decline by nine percent and eight percent respectively.
Financial and legal software firms took particularly hard hits. FactSet shares fell 10.51 percent, while Blue Owl shares dropped 9.76 percent on the same day. Shares of Salesforce, Workday, Intuit, and Snowflake fell sharply after Anthropic’s announcements, losing between six percent and 13 percent. Morgan Stanley equity analyst Toni Kaplan noted in a report that although the product is in its initial stages, developments intensify investor concerns that AI-driven companies could penetrate the legal tech market and rival larger entities like Thomson Reuters and RELX.
Software Engineers Divided on Vibe Coding Impact
Business Insider surveyed 167 software engineers about vibe-coding, the creation of code using artificial intelligence. The term was coined by Andrej Karpathy and was named Collins Dictionary’s Word of the Year for 2025. The survey found that 75 engineers, representing 46.9 percent of respondents, said they were keeping up with AI tools. Thirty engineers felt ahead of the curve, while 27 felt behind. Notably, 28 engineers, or 17.5 percent of respondents, said they were opting out of using AI code editing tools entirely, citing that the tools weren’t advanced enough or took too long to learn.
In follow-up conversations, eight engineers told Business Insider how they feel about AI code editors. Ryan Shah, a 23-year-old AI consultant from Atlanta, uses Cursor and Google’s Antigravity paired with Claude Opus 4.5, which he described as being at midlevel engineer status. Shah said his software engineering courses taught him to read code, a skill that coupled with his vibe-coding proficiencies keeps him from being the first one laid off.
However, Javanie Campbell, the 35-year-old CEO of DevDaysAtWork based in Jamaica, warned that over-reliance on vibe-coding tools will put careers in danger. Campbell stated that for people who turn to large language models as the God or the expert, they will be replaced. Ryan Clinton, a 46-year-old software developer from Nashville, explained that more experienced engineers work on architecture and design while more junior staffers code, and at this point of AI coding, human intervention is still routinely necessary.
Productivity Gains Remain Contested
Ed Gaile, a 55-year-old Appfire principal solutions architect from Atlanta, said AI tools have doubled, if not tripled, his productivity, particularly impressed by the decrease in context switching that vibe-coding tools brought. However, productivity claims remain contested. A July study by METR asked experienced developers to complete a series of tasks and found that study participants working without AI’s help spent 10 percent more time coding, but those with AI assistance spent 20 percent more time reviewing AI outputs, prompting AI, waiting on AI, or being idle. Ultimately, the study found that AI-assisted developers were less productive.
Gus De Souza, a 48-year-old software architect from Kitchener, Ontario, said he saved time on coding but spent more time reviewing the AI-generated code, with the real productivity gains coming in troubleshooting. Lara Fraser, a data analyst and epidemiologist from Sarasota, Florida, noted that model generation matters, stating that GPT 5.1 was great but 5.2 was a disaster. Fraser said that for vibe-coding, anyone can create an app but not everyone can maintain it, adding that inevitably something’s going to break and if you can’t fix it, you’re a vibe-coder.
Jobs Discussion Dominates Davos
At the World Economic Forum’s annual meeting in Davos in January 2026, business leaders expressed confidence about AI’s employment potential despite freezing temperatures, geopolitical strains, and skepticism surrounding artificial intelligence. Senior executives said that while jobs would disappear, new ones would spring up, with two individuals telling Reuters that AI might be utilized as a justification by firms already contemplating layoffs.
Nvidia CEO Jensen Huang asserted at the conference that the technology is paving the way for increased wages and additional job openings for tradespeople such as plumbers, electricians, and steelworkers. Huang stated that the energy sector is generating jobs, the chip industry is generating jobs, and the infrastructure sector is generating jobs, repeating the phrase jobs, jobs, jobs. However, Christy Hoffman, general secretary of UNI Global Union representing 20 million workers, stated that AI is marketed as a tool for productivity, which frequently translates to achieving more with fewer employees.
