AI comes for software companies

Summary of AI comes for software companies

by Marketplace

6m•February 6, 2026
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Overview of AI comes for software companies

This Marketplace episode covers three connected economic stories: how rapid advances in AI are rattling traditional enterprise software companies and their stocks; why cryptocurrencies — led by bitcoin — are plunging; and what the current labor-picture looks like for small and mid-sized employers. Reporters summarize market moves, analyst reactions, and on-the-ground business experiences to show how technology, markets and costs are reshaping business decisions today.

AI and the enterprise software shakeup

  • What happened

    • Big enterprise software names have plunged: Salesforce down ~25% year-to-date, Intuit down ~31%, and an S&P software index down ~17% (figures cited in the episode).
    • Investors reacted sharply after Anthropic released new agentic automation plugins for Claude Co-Work that target sales, legal and financial analysis workflows — areas traditionally served by enterprise software.

  • Why it matters

    • Analysts worry that agentic AI could automate tasks currently handled by enterprise software, reducing the value of existing platforms.
    • The speed of innovation surprised many: analysts expected this disruption years later (2027) but see it arriving in 2025–2026.

  • Analyst perspectives

    • Rishi Jaluria (RBC): Enterprise software is central to many organizations today — big customers won’t immediately abandon systems.
    • Brent Thill (Jefferies): Concerns may be overblown; regulated sectors (banks, insurers) with entrenched workflows are unlikely to rip out systems immediately, giving software vendors time to integrate AI.
    • Arun Chandrasekharan (Gartner): The market reaction reflects surprise at the pace of AI advances and uncertainty over how quickly disruption will arrive.

  • Main takeaway

    • Enterprise software faces real disruption risk, but many companies may have time to adapt by embedding AI into existing offerings. The key uncertainty is timing and pace.

Cryptocurrency market weakness

  • What’s happening

    • Bitcoin is reported as falling below $70,000 and having lost nearly half its value since last October; other cryptocurrencies (Ether, Solana, etc.) are also down.

  • Causes cited

    • Investors reverting to traditional safe havens (e.g., gold) during volatility.
    • Crypto has not widely become a medium of exchange — it remains largely speculative trading.
    • Competition from other speculative platforms (sports betting, prediction markets).
    • Tech-stock downturns spooking crypto traders as both are seen as risk-on assets.

  • Main takeaway

    • Crypto’s volatility continues; without broader real-world use cases and amid macro/tech weakness, prices remain sensitive to risk sentiment.

Labor market — small and mid-sized business perspective

  • Data context

    • Official BLS jobs data were delayed due to a partial government shutdown, so reporters rely on alternative indicators: job openings fell in December, layoffs rose in January (Challenger), and ADP showed weak payroll growth.

  • On-the-ground reporting (small business examples)

    • Jim Piper (Kellair Dampers, sheet metal fabrication): About 30 employees; main problem is lack of demand and rising input costs (steel/aluminum tariffs), so he’s not replacing all voluntary departures. Hiring is not the issue — demand is.
    • Chris Knudsen (three restaurants/brewpub): January slower than expected; inflation reduces dining out and spending per customer, so staffing is kept low (45–50 vs. ideal 60–65).
    • Emily Bordner (EB & Co., jewelry retail/wholesale): After viral sales and expansion in 2024, margins were squeezed by tariffs and consumer pullback. New stores staffed minimally.

  • Common themes

    • Businesses are leaning into minimal staffing and cost control rather than aggressive hiring.
    • Labor availability is less of a problem now; demand weakness and rising costs are the primary constraints.

Key takeaways

  • AI advancements (agentic tools/plugins) are accelerating investor concern about the future value of traditional enterprise software — but entrenched, regulated customers may slow an immediate replacement.
  • Market reactions reflect surprise at the speed of change; software vendors that move to integrate AI may preserve value.
  • Cryptocurrencies remain highly speculative and are suffering alongside tech equities as investors seek safer assets.
  • For small and mid-sized businesses, current stressors are demand and input-cost increases (tariffs, inflation) rather than inability to hire; many are keeping staffing lean.

Practical recommendations (for listeners)

  • Investors: Monitor how major software vendors respond — look for credible AI integration strategies and customers’ willingness to adopt replacement solutions before making portfolio shifts.
  • Business owners: Prioritize cost-control and flexible staffing until demand stabilizes; evaluate where AI automation could realistically reduce cost or improve throughput without disrupting core customer relationships.
  • Consumers/crypto traders: Treat crypto positions as high-risk and be mindful of macro and tech-sector correlations when sizing positions.