Software companies reacted swiftly to Anthropic’s new Claude Cowork plugins: their stocks dropped. The Cowork plugins are the next level of agentic AI tools for developing legal, data governance and compliance solutions (and there may be other solutions to follow, I’m sure). What’s different is that these tools do it all — from developing solutions and workflows to coding and producing customized solutions with all the data connections needed.
What spooked investors is that the Cowork plugins could potentially make “seat-based” software subscriptions obsolete.
“The selling pressure in software and data analytics reflects a deepening structural debate,” said Jonathan McMullan, analyst at Schroders, to Reuters. “[The] speed of AI advancement makes long-term valuations harder to defend, particularly as AI tools allow businesses to do more with fewer staff, threatening the traditional model of charging per software user.” If an AI agent can do the work of three junior lawyers, companies may no longer need to take an expense-laden SaaS route to arm three developers to build solutions.
The result is that Wednesday’s sell-off hit companies like Thomson Reuters, LegalZoom, Salesforce and Wolters Kluwer, among others, whose solutions are in Cowork’s direct path.
Legacy giants still rule
Even so, these companies may expect quick recoveries, as the hype dies down and reality sets in. Claude is powerful, but the tooling that comes with them has to start at the AI training ground floor, whereas tools like Thomson Reuters, which owns Westlaw, a massive database of case law and statutes, are steps ahead, working with up-to-date proprietary data. An AI model without access to such a specific, verified database is prone to “hallucinating” legal precedents.
As well, it would be a bit too early for any company to put its faith in an Anthropic plugin for critical use cases like liability or compliance. Established software vendors offer service-level agreements, indemnification and security guarantees. General Counsels and CIOs aren’t about to swap their trusted, insured enterprise platforms for a low-cost AI plugin overnight — the legal risks are massive.