Investors’ concerns that artificial intelligence tools could enable faster and cheaper software development have reportedly driven a selloff that has impacted the world’s largest software businesses.
Monday.com saw a 30% drop Tuesday (Aug. 13), SAP saw a 7.1% drop, and Salesforce and Workday saw a slide Monday (Aug. 12), Bloomberg reported Tuesday. Smaller companies like Sage Group and Dassault Systemes also saw declines.
In addition, Gartner, which offers research insights and IT consultancy services, reduced its full-year outlook last week in a move that analysts attributed to competition from AI research tools, according to the report.
Software is among the weakest performers in the tech sector so far this year, the report said.
RBC Capital analysts wrote in a Tuesday note that volatility is likely to continue in the short term due to the “‘death of software due to AI’ narrative.”
Jeffries analyst Brent Thill told CNBC Tuesday, per the report, that he believes “the fear is overblown,” but for now, investors remain concerned about the software sector.
PYMNTS reported in May 2024 that AI is transforming the art of computer programming by offering developers a new toolkit to brainstorm ideas, write and refine code, and fix bugs.
“Simply put, generative AI can write your code for you,” Bob Rogers, CEO of Oii.ai, a supply chain AI company, told PYMNTS at the time. “Programming is a language, and generative AI honestly doesn’t mind switching from English to Spanish to Python or JavaScript, and it’s fluent in all of them.”
PYMNTS said at the time that the increased efficiency offered by AI tools has far-reaching implications for businesses across industries, as the tools enable developers to create software and applications faster and with fewer resources.
PYMNTS reported in August 2024 that while generative AI was not yet making money in some fields, it was proving its value in powering coding assistants.
At the time of the report, one coding assistant, Microsoft-owned GitHub Copilot, had drawn nearly 2 million paying subscribers since its launch in 2022 and contributed to a 45% year-over-year increase in GitHub’s revenue.
Source: https://www.pymnts.com/news/artificial-intelligence/