Anthropic’s Claude Cowork plugins triggered a $285 billion global software sell-off
The Nifty IT index plunged 6.84% amid fears of AI-led business disruption
SaaS companies face intense pricing pressure as AI agents replace traditional workflows
Shares of global and domestic software and IT companies had already been witnessing a gradual decline, but the sell-off has turned sharply steeper in recent sessions. This sudden plunge has largely been driven by Anthropic’s release of new plugins for its Claude Cowork tool, which triggered panic across the sector as investors reassess the long-term outlook for software and IT services.
Jeffrey Favuzza, an equity trader in Jefferies named this phenomenon as ‘Saaspocalypse,’ as reported by Bloomberg. He characterised it as an apocalypse for software-as-a-service stocks, noting that trading sentiment has shifted decisively to “get me out” style selling, reflecting fears over disruption, pricing pressure and future growth prospects for the sector.
1 January 2026
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The Trigger
On January 30, 2026, Anthropic expanded its AI agent Claude Cowork’s capabilities by introducing 11 new plugins. These plugins allow users to bundle skills, connectors, slash commands and sub-agents together, effectively turning Claude into a specialist tailored to a specific role, team or organisation.
While plugins can be used across a wide range of tasks, Anthropic says they are particularly effective for role-specific workflows in areas such as sales, legal work and financial analysis.
Soon after the tool was made available, shares of legal software and publishing firms tumbled.
The Fall
A Goldman Sachs basket of US software stocks reportedly fell 6% in a single session, marking its worst one-day decline since April. According to Bloomberg, the broader sell-off wiped out nearly $285 billion in market value across software, financial services and asset management stocks, highlighting the scale of the rout.
“The fear with AI is that there’s more competition, more pricing pressure, and that their competitive moats have gotten shallower, meaning they could be easier to replace with AI,” Thomas Shipp, head of equity research at LPL Financial told Bloomberg.
The pressure has been building for weeks. The S&P North American Software Index is on a three-week losing streak and slipped around 15% in January, its steepest monthly fall since October 2008. The sharp decline reflects rising investor concerns over stretched valuations and slowing growth prospects in the software sector.
Weakness was also visible in frontline US technology stocks. Shares of major software companies reportedly slid sharply on Tuesday, dragging the Nasdaq down by more than 350 points. Microsoft also fell 2.9% during the session, extending its losing streak to four consecutive days.
Indian IT Spill Over
The sell-off spilled over into Indian markets as well. Shares of Indian information technology companies dropped nearly 7% on Wednesday, with heavyweights such as Infosys, Tata Consultancy Services (TCS), HCLTech and Wipro facing intense selling pressure.
By 12 pm, LTIMindtree was down 7.97%, Infosys fell 7.89%, Coforge declined 7.73% and Persistent Systems slipped 7.49%. Mphasis dropped 7.07%, Tech Mahindra fell 6.68% and TCS was down 6.29%. HCLTech declined 5.76%, Wipro slipped 4.52% and Oracle Financial Services Software fell 3.98%. Reflecting the broad-based sell-off, the Nifty IT index plunged 6.84%.
Analysts attributed the decline to the launch of a new AI tool by Anthropic, which reignited concerns around competitive disruption and pricing pressure.
Claude Cowork & its New Plugins
Claude Cowork is an AI agent developed by Anthropic as a research preview, designed to function as a collaborative and largely autonomous teammate within the Claude Desktop app.
Running locally on a user’s computer, it can read, create and edit files, and carry out multi-step, non-technical tasks such as organising documents, analysing data and automating workflows with minimal supervision. Anthropic positions the tool as a “co-worker” that can take ownership of routine but time-consuming work rather than just responding to prompts.
In practical terms, Claude Cowork can reorganise a cluttered downloads folder by sorting and renaming files, create a spreadsheet of expenses from a collection of screenshots, or generate a first draft of a report from scattered notes. The tool was released on January 12, 2026.
The new plugins released latestly expanded the capabilities of Claude Cowork.
The 11 plugins span different domains, including productivity, enterprise search, plugin creation and customisation, sales, finance, data analysis, legal work, marketing, customer support, product management and biology research.
Together, they are intended to position Claude Cowork not just as a general-purpose assistant, but as a configurable AI teammate that adapts to how individuals and organisations actually work.
“Plugins let you go further: tell Claude how you like work done, which tools and data to pull from, how to handle critical workflows, and what slash commands to expose so your team gets even better and more consistent outcomes,” the company said in a blog post.
