Global markets are undergoing a sharp rethink as investors grapple with the next phase of artificial intelligence, one that may no longer reward all technology companies equally. The past week has seen heavy losses across software and services stocks, signalling growing anxiety that AI driven automation could reshape entire industries while rendering others obsolete.
Investors began the week fleeing traditional safe havens such as gold and silver, only to end it questioning which businesses will retain value in an economy increasingly dominated by advanced automation. The sell off in technology has been particularly severe. The S and P five hundred software and services index is on track to lose around one trillion dollars in market value, marking one of its steepest corrections in years.
The immediate trigger was the release of a new artificial intelligence tool by Anthropic that promises to automate complex legal tasks and potentially expand into sales, marketing and data analysis. While the product itself remains largely untested at scale, markets reacted as if a broader line had been crossed. The message from investors was clear. AI is no longer just a productivity boost. It is now a force capable of eliminating entire categories of white collar work.
This shift has exposed a new reality for markets. Rather than lifting all technology stocks together, AI is expected to create winners and losers. Investors are increasingly trying to distinguish between companies that will lead the disruption and those that will be disrupted. In theory, this environment should favour active fund managers. In practice, it has made stock selection far more difficult, as historic correlations and sector trends break down.
Adding to the unease is the scale of spending required to dominate artificial intelligence. Shares in Amazon fell sharply after the company projected a fifty percent jump in capital expenditure for two thousand twenty six. Alphabet also saw its stock decline despite unveiling plans to spend up to one hundred eighty five billion dollars this year, much of it linked to AI infrastructure. Investors appear torn between believing these investments are essential and fearing they may strain profits for years.
The risk off mood spilled into other asset classes. Bitcoin briefly touched a sixteen month low before stabilising, while gold fell roughly ten percent from recent highs after extreme volatility. Silver experienced even sharper swings, trading more than a third below its peak following record single day losses. Analysts suggest these moves reflect speculative positioning and technical pressures rather than a fundamental reassessment of precious metals.
Central banks provided little reassurance. The Bank of England narrowly voted to keep interest rates unchanged, while the European Central Bank also held steady. In contrast, the Reserve Bank of Australia surprised markets with its first rate hike in over two years, raising questions about whether global inflation pressures are re emerging.
Energy markets were equally unsettled. Oil prices swung with geopolitical tensions involving the United States, Iran and trade discussions with India, underlining how forces outside traditional supply managers continue to dominate pricing.
As investors head into the coming weeks, the debate is no longer about whether AI will transform the global economy. It is about how disruptive that transformation will be, how many jobs it may replace, and which companies will survive in a world where intelligent machines increasingly do the work once done by humans.
