Anthropic's Legal AI Tool Triggers Tech Stock Selloff

Anthropic's release of a new artificial intelligence tool designed to automate legal tasks triggered a widespread selloff in global software and technology stocks last week, amplifying investor fears that AI could disrupt traditional industries reliant on knowledge work.

The tool, a plugin named Legal for Anthropic's Claude Cowork AI agent, became available in late January. It enables users to configure automated processes for contract review, nondisclosure agreement assessments and compliance workflows, tailored to an organization's specific guidelines and risk levels. Anthropic emphasized that the outputs do not constitute legal advice and must be verified by licensed attorneys. The announcement rippled through financial markets, with the S&P 500 software and services index dropping nearly 9 percent over five trading sessions and more than 20 percent from its October peak. The Nasdaq 100 Index declined 2.6 percent, while a Goldman Sachs basket of U.S. software stocks fell 6 percent in a single day, its largest drop since April.

In the U.S., shares of Thomson Reuters, which operates a major legal division, plunged over 20 percent in five days. LegalZoom and other firms in legal...