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Investors face challenges as AI enhances systems, not replaces the foundational software structures businesses rely on daily.
On 6 February following the launch of Anthropic's Claude Cowork and their new open-source plugins providing AI agents with the ability to perform complex tasks without needing access to all of the requisite data beforehand, there was extensive market activity around these developments, as shown in the live demonstrations where the AI could perform complete legal research and generate a full legal document.
There was a rush of activity by the investing community because of these demonstrations of the AI technology. Investments associated with companies involved in software, data service, and IT outsourcing experienced large drops in share prices due to sales caused by investors.
Experts in the area of technology warn that this does not mean that the software industry is dead at this time. They believe that AI is evolving quickly enough to change how software is written and how organizations complete tasks, but they do not reference the traditional software industry as being 'dead' at this time as a result of these changes. Therefore, it will be difficult for today's investors to find which companies provide competitive benefits to investors and which will be at risk of losing that competitive benefit due to advances in technology.
Enterprise software that will likely last in the enterprise environment is called “Systems of Record.” Enterprise Systems are the official and secure places to hold a business’s important operational data such as financial transactions, customer records, and compliance documentation. For many years, these systems have been an essential part of any business, provide a durable means for a company to store, and manage its critical information; the reliability of these systems will be maintained well into the future, even as AI technology continues to develop.
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