Trillion-dollar tech wipeout ensnares all stocks in AI's path

• Hundreds of billions of dollars were wiped out from tech stocks, bonds, and loans, with software stocks losing nearly $1 trillion from the iShares software ETF.
• The selloff was triggered by Anthropic's announcement of a new AI legal tool, sparking fears that AI will displace established tech firms.
• Investors worry that traditional tech companies may no longer be innovation leaders and could struggle to maintain past growth rates due to AI disruption.

A recent multi-billion dollar tech market meltdown, particularly in software stocks, is attributed to investor anxiety over AI's potential to disrupt established companies like ServiceNow and Salesforce. The fear stems from AI reshaping industries and displacing traditional innovation leaders, rather than a market bubble, despite current financial performance remaining stable.