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You might have missed this, but something wild happened in tech stocks last week. And I mean properly wild.
On Friday, January 30, a company called Anthropic released 11 free plugins for their Claude assistant. By Tuesday evening, software companies had collectively lost 285 billion dollars in market value.
Let me repeat that. Two hundred and eighty-five billion dollars. Gone in four days.
Thomson Reuters dropped 18%. LegalZoom crashed 18%. DocuSign fell 11%. Salesforce, Adobe, ServiceNow, all down between 7% and 11%. Wall Street analysts started calling it the "SaaSpocalypse."
I spent the last few days digging into what actually happened here. Because on the surface, this makes no sense. How does a free software update trigger a quarter-trillion-dollar panic?
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Here's what Anthropic actually released
Claude Cowork is their workplace assistant. It reads documents, organizes files, writes emails, the usual stuff. The 11 plugins they dropped are basically instruction manuals that tell Claude how to do specific jobs. One for sales teams, one for customer support, one for data analysis.
And one for legal work. That's the one that started the chaos.
Now here's the interesting part. This legal plugin isn't some groundbreaking technology. It's not trained on millions of court cases. It's literally just Claude being given a checklist of how to review contracts, flag compliance issues, check NDAs, and write legal summaries.
Anthropic even put a disclaimer on it saying you should still have a real lawyer review everything. Nobody cared about that detail.
The real issue isn't what the plugin does. It's who built it.
The Platform Shift
Before: Companies like Thomson Reuters licensed models to build their own legal tech products.
Now: Anthropic builds complete solutions directly. You're no longer their customer. You're their competition.
For months, software stocks have been riding high on one assumption. Big tech companies build the models, established software companies add the industry expertise and customer relationships, and everyone wins.
That story fell apart in four days.
Investment firm Jefferies described the trading as "get-me-out style selling." That's trader language for panic.
One analyst pointed out that enterprises now make up 80% of Anthropic's business. A year ago, that number was close to zero.
And Anthropic moves fast. Their Claude Code product hit a billion dollars in annual revenue in six months. Six months. Cowork launched on January 12. The plugins came out 18 days later.
Traditional software companies have quarterly planning cycles, compliance reviews, stakeholder meetings. By the time they schedule a discussion about a new feature, Anthropic has already shipped it.
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Not everyone thinks the panic was justified
Nvidia's CEO Jensen Huang called the selloff "the most illogical thing in the world." His argument makes sense. These tools still need to connect to existing software. You don't throw away all your tools just because a new one shows up.
Google's CEO Sundar Pichai said basically the same thing. Companies that adapt will be fine.
And they're probably right. Enterprise software has decades of customer relationships, compliance requirements, security protocols, and integration systems. A folder of prompts doesn't replace that overnight.
But here's the uncomfortable question. If Claude with a plugin can handle 80% of what a law firm needs, will they still pay full price for the enterprise solution? Or will they just subscribe to Claude for 20 dollars a month?
That's what's keeping software executives up at night.
The startup caught in the middle
There's another layer here that makes this messier. Legal tech startups like Harvey raised billions of dollars to build tools using models from companies like Anthropic. Harvey is valued at 8 billion dollars.
Now imagine being them. You built your entire company on Anthropic's models. Then Anthropic decides to compete with you directly. And they can move faster and cheaper because they own the underlying technology.
That's every platform builder's nightmare.
What this actually means
Anthropic is reportedly raising 20 billion dollars at a 350 billion dollar valuation. Four months ago, they were valued at 183 billion. That kind of growth doesn't come from selling API access. It comes from investors believing you're building the foundation for how all work gets done.
Software executives now face an impossible choice. Do you build on someone else's models and risk being undercut? Or do you spend billions trying to build your own? Both options are expensive. Neither guarantees you survive.
And the companies caught in the middle might not have enough time to figure out which side they belong on.
That's what 285 billion dollars of panic looks like.
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