Chapter 1: What is the main topic discussed in this episode?
AI is starting to close its jaws around traditional tech. From Marketplace, I'm Sabri Beneshour, in for David Brancaccio. Software companies are in trouble, or at least their stocks are. Salesforce helps businesses with software for sales and marketing and customer service. Its stock is down 25% this year, and it is barely February. Intuit, they make software to help with accounting and taxes.
Their stock is down 31% this year. And software stocks in general, according to an S&P index, are down 17%. The reason for all of this? Artificial intelligence.
Chapter 2: Why are software companies facing stock declines?
The startup Anthropic just released a new automation tool that investors fear could make many software companies obsolete. Marketplace's Nova Sappho has more.
Organizations with a lot of operational balls in the air use enterprise software from the likes of Salesforce, Workday, ServiceNow, and others.
These are companies that are just at the heart of every business worldwide today.
That's Rishi Jaluria, Managing Director of Software Research at RBC. Now comes Anthropic's new plugins for Claude Kork, designed to automate functions in sales, legal, and financial analysis, among other things, key domains for enterprise software.
Many software investors believe the actual value of the software industry is going towards zero.
Brent Thill at Jefferies analyzes tech companies. He thinks the market's concerns are overblown, though.
You're not going to see massive banks that are regulated, insurance companies that have the data and process workflows are unlikely to fully rip out these systems going forward.
Consequently, software companies have time to integrate AI into their offerings. So why, then, are markets reacting so negatively now to developments in agentic AI? Analyst Arun Chandrasekaran at Gartner researches AI's impacts.
I think people are just surprised by the sheer pace of innovation, I would argue, in this ecosystem, which is a way of saying, I thought this was going to happen in 2027, and I can't believe that it's happening in 2025 or 2026.
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Chapter 3: What impact does Anthropic's new tool have on software companies?
I'm Nancy Marshall-Genzer for Marketplace.
If we wanted to know exactly how the labor market was doing, we would normally just look it up at the Bureau of Labor Statistics. But that data was delayed because of the partial government shutdown. So we have to snoop around elsewhere for clues. We do know that job openings fell sharply in December. Layoffs rose in January, according to Challenger Grand Christmas.
And payroll processors like ADP are reporting weak job growth. Marketplace's Mitchell Hartman reports on how this job market is playing out for small and mid-sized employers.
Jim Piper runs a sheet metal fabrication company, Kell Air Dampers, outside Chicago.
He's got about 30 full-time employees, and he says... Hiring is not an issue that I'm deeply worried about right now, unfortunately.
He's more worried about bringing in enough work.
It's been a tough start to the year. The fundamentals aren't great. Costs are up, demand's down.
Trump's tariffs on steel and aluminum are pushing up the prices he pays suppliers. Meanwhile, customers aren't ordering as much of the airflow control equipment that the company makes because regulation of factory emissions is being rolled back. Over the last year, as a few employees have voluntarily left the company... We're simply not backfilling those positions.
Across the country in Olympia, Washington, Chris Knudson owns three restaurants, a brew pub and two Italian restaurants. I asked him, how's business right now? Not awesome. It's always a little bit slow in January, especially on the brewery side. blame dry January for that. But this January has been slower than last.
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