Anthropic’s newly launched AI plugins have triggered what analysts are calling a ‘SaaSpocalypse’—a brutal selloff that wiped out roughly $285 billion from software, legal tech and financial services stocks in a single trading session. The AI developer, known for its Claude chatbot, released 11 open-source plugins for its Claude Cowork tool on Friday, January 30. One of them targets legal workflows, and that alone was enough to send investors running for the exits.Thomson Reuters dropped over 15%. RELX, owner of LexisNexis, fell 14%. LegalZoom got hammered nearly 20%. A Goldman Sachs basket tracking US software stocks posted its worst single-day decline since April’s tariff-driven selloff. The Nasdaq fell 1.4%, with ripple effects extending to Indian IT giants—Infosys ADRs slipped 5.5% and Wipro fell nearly 5%.
What exactly did Anthropic release
Claude Cowork is an agentic AI assistant that Anthropic launched earlier in January. Think of it as Claude Code—the company’s developer-focused coding tool—but redesigned for non-technical professionals. It can read files, organise folders, draft documents and carry out multi-step tasks with user consent.The plugins announced last Friday supercharge this capability. They let companies tailor Claude to specific job functions by specifying how work should be done, which tools and data to pull from, and what workflows to automate. Anthropic open-sourced 11 starter plugins covering productivity, sales, marketing, finance, data analysis, customer support, product management and biology research.But it was the legal plugin that spooked markets. It automates contract review, NDA triage, compliance checks and legal briefings. Anthropic was careful to note that all outputs should be reviewed by licensed attorneys and that the tool does not provide legal advice. That disclaimer did little to calm investors.
Why the market panic over a folder of prompts
Here’s the thing that has caught many observers off guard: the legal plugin is essentially a set of prompts and configurations. There’s no proprietary model fine-tuned on case law, no special legal reasoning engine. It’s Claude being Claude, but with structured workflow instructions.The real signal, analysts say, is that Anthropic has moved from selling the model to owning the workflow. When Claude was just an API, companies like Thomson Reuters could build on top of it. Thomson Reuters literally runs CoCounsel on OpenAI. But when Anthropic starts publishing ready-made vertical solutions, the platform becomes the competitor.Jefferies dubbed the selloff a ‘SaaSpocalypse’, noting that investor sentiment has shifted dramatically. The narrative used to be that AI helps software companies. Now it’s that AI replaces them. ‘Trading is very much get-me-out style selling,’ said Jeffrey Favuzza from Jefferies’ equity trading desk. The brokerage also noted that OpenAI appears to be losing ground in the corporate market to Anthropic’s Claude, with enterprises now accounting for 80% of Anthropic’s business.Not everyone is convinced the panic is justified. Nvidia CEO Jensen Huang called the selloff ‘the most illogical thing in the world,’ arguing that AI will use existing software tools, not replace them. ‘Would you use a screwdriver or invent a new screwdriver?’ he said at a Cisco event. Google CEO Sundar Pichai echoed the sentiment during the company’s earnings call, suggesting the scramble was overblown and that companies ‘seizing the moment’ with AI would find opportunity, not obsolescence.
What does this mean for the software industry going forward
The damage extended well beyond legal tech. DocuSign fell 11%, Salesforce dropped nearly 7%, Adobe slid 7%, and ServiceNow declined 7%. Business development companies with exposure to software loans also got caught in the selling. Blue Owl Capital Corp fell 13%, marking a record ninth consecutive decline.Anthropic isn’t the only player in legal AI. Startups like Harvey AI (valued at $5 billion) and Legora ($1.8 billion valuation) have been developing tools for years. But Anthropic’s advantage is that it builds its own underlying models. Firms like Legora rely on models from developers like Anthropic, which means Claude’s creator can potentially disrupt both traditional legal services and the startups trying to disrupt them.The company’s growth trajectory underscores why investors are taking this threat seriously. Claude Code hit $1 billion in annualised recurring revenue by November, just months after its May launch. Anthropic is now reportedly raising $20 billion at a $350 billion valuation—up sharply from $61.5 billion in March 2025.The iteration speed is also striking. Cowork launched on January 12. The plugins dropped less than three weeks later. Enterprise software companies typically spend quarters on such releases.For software executives watching the carnage unfold, the takeaway is uncomfortable but clear: Anthropic didn’t need a breakthrough product to rattle markets. It just needed to show what Claude could already do—and hit publish.
