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A seismic shift in artificial intelligence capabilities sent shockwaves through global markets Tuesday, with Anthropic’s new legal AI tool triggering billions in losses for data and software companies while Walmart celebrated a historic $1 trillion valuation milestone.
Anthropic’s Legal AI Sparks Data Stock Collapse
Anthropics unveiled AI tool specifically designed for in-house lawyers devastated European data and legal software giants, wiping billions from market capitalizations. London-listed Relx plummeted nearly 11 percent, while education publisher Pearson fell around 4 percent. The selloff extended across the Atlantic, with US analytics firms including S&P Global and Intuit sliding as investors fled companies previously considered AI beneficiaries.
The market reaction underscores growing fears that AI will disrupt traditional software and data analytics businesses faster than anticipated. Companies that once seemed positioned to profit from AI adoption now face the prospect of being replaced by more sophisticated tools.
Walmart Achieves Retail History
While AI disruption hammered tech stocks, Walmart celebrated becoming the first traditional retailer to reach a $1 trillion market valuation. The milestone propels Walmart into an elite club dominated by tech giants like Nvidia and Alphabet, though Amazon’s $2.6 trillion valuation remains more than double Walmart’s achievement.
Walmart’s surge reflects its successful transformation into a digital competitor, with e-commerce sales jumping 28 percent in the three months ending October 31. The retailer’s partnership with OpenAI, announced in October, allows customers to plan meals and discover products through conversational AI. Chief Executive John Furner, who began his tenure just as the company hit the trillion-dollar mark, has championed these AI investments.
The company’s decision to move from the New York Stock Exchange to the tech-heavy Nasdaq reinforces its push to be viewed as a digital enterprise rather than a traditional brick-and-mortar retailer.
Global Markets Retreat
Broader market sentiment turned negative as major indices declined on both sides of the Atlantic. The S&P 500 closed nearly one percent lower as investors staged a massive retreat from technology stocks. German markets also struggled, with the DAX briefly touching 25,100 points before retreating to close unchanged at 24,781 points.
SAP continued its recent decline, falling 4.9 percent to 166 euros after suffering a 16 percent crash the previous week. The German software giant’s struggles highlight broader concerns about established tech companies facing AI disruption.
US Federal Reserve Bank of Richmond President Thomas Barkin provided some optimism, suggesting previous interest rate cuts had strengthened the labor market while officials work to bring inflation back to target levels. However, potential delays in key economic data due to ongoing federal government shutdown concerns added uncertainty.
Market Disruption Accelerates
The day’s events highlight AI’s accelerating impact on traditional business models. While Walmart demonstrates how established companies can successfully integrate AI to drive growth, the collapse in data and legal software stocks shows the technology’s destructive potential for incumbent players.
Investors now face the challenge of identifying which companies will thrive in an AI-driven economy versus those facing obsolescence. The speed of Tuesday’s market reactions suggests this transformation may happen faster than many anticipated, making traditional sector classifications increasingly irrelevant as AI reshapes entire industries.
Sources: Financial Times, Handelsblatt, Borsen, BBC, Cityam
