Investors have spent months grappling with uncertainty over how artificial intelligence might transform the economy, but those concerns spilled into the stock market last week.

The catalyst was AI startup Anthropic, which rolled out new tools designed to automate tasks across sectors such as legal services, data analysis and financial research.

The announcement stoked fears that the technology could disrupt established businesses, triggering a broad sell-off in shares ranging from Expedia Group Inc. and Salesforce Inc. to London Stock Exchange Group Plc.

By Friday, bargain hunters stepped in, helping the widely watched iShares Expanded Tech-Software Sector ETF (IGV) recover from a 12 per cent drop over the prior four sessions, according to Bloomberg.

For exhausted Wall Street professionals, shaken by days of turbulent trading, the takeaway was unmistakable: this is the new normal.

“Things are shipping out weekly, daily,” said Daniel Newman, chief executive officer of the Futurum Group. “The blast radius of companies that could be impacted by AI is going to grow daily.”

Despite the end-of-week rebound, the losses were substantial.

It is reported that Thomson Reuters Corp.’s Canada-listed shares tumbled 20 per cent over the week, their steepest decline on record.

Meanwhile, financial research firm Morningstar Inc. endured its worst weekly showing since 2009, while software companies HubSpot Inc., Atlassian Corp., and Zscaler Inc. all fell more than 16 per cent.

In total, 164 stocks across the software, financial services, and asset management sectors lost $611 billion in market value last week, Bloomberg reported.

AI’s transformative potential has been widely discussed since the launch of OpenAI’s ChatGPT in late 2022. Until recently, the spotlight was largely on the beneficiaries. With hundreds of billions invested to expand computing power, investors poured into companies expected to gain—from chipmakers and networking firms to energy and materials producers.

Although the “pick-and-shovel” approach is still proving profitable, the fast pace of AI tool launches from startups like Anthropic and OpenAI, along with Google, is making the long-expected disruption feel imminent. In just the past month, Google rattled video-game stocks by unveiling a tool that can generate immersive digital worlds from simple text or image prompts.

At the same time, Anthropic’s release of a Claude-based work assistant sent software stocks tumbling.