Good morning. Fears that AI could render traditional software vendors obsolete triggered a broad SaaS and cloud sell-off in February, a rout that some investors dubbed “SaaSpocalypse.” The catalyst: Anthropic’s addition of a legal task plug-in to its Claude AI, which wiped roughly $285 billion in tech market value within 24 hours.
The anxiety was straightforward. If AI can perform the tasks once handled by specialized software, or generate bespoke code on demand, why keep paying for software platforms at all? In a Fortune feature, my colleague Jeremy Kahn, Fortune’s AI editor, argues that this framing misses the larger pattern. New technologies rarely eliminate their predecessors outright. More often, they reshape markets, compress margins, and shift where value accrues. Desktop publishing didn’t kill commercial printing, for instance. It democratized it.
