**Global Software Selloff: The AI Displacement Panic** The software sector is currently facing a "SaaSpocalypse," with investors aggressively exiting positions in established players. The market narrative has shifted violently from viewing Artificial Intelligence as a growth driver to seeing it as an existential threat to the traditional Software-as-a-Service (SaaS) business model. **The Crash by the Numbers** The selloff has been swift and severe. The **iShares Expanded Tech-Software Sector ETF (IGV)** has plummeted approximately **18%** in recent trading sessions. Major industry heavyweights are bearing the brunt of this correction: * **Intuit** slumped **11%** on fears that AI agents will automate financial workflows. * **Salesforce** and **Adobe** shed roughly **7%**, driven by concerns over "seat-based" pricing models becoming obsolete. * **Relx**, a leader in analytics, plunged **14%**, signaling investor belief that AI can now replicate complex knowledge work. * **Nifty IT** (India) dropped **7%** in a single session, erasing nearly **₹2 lakh crore** in investor wealth. **The Catalyst: AI Agents** The immediate trigger for this volatility was the release of **Anthropic’s "Claude Cowork"** and similar agentic tools from competitors like Google. Unlike previous AI chatbots, these "agents" are designed to autonomously execute end-to-end tasks—legal reviews, coding, and compliance checks—that were previously the domain of human workers using specialized software. Investors fear a transition to "Service as a Software," where AI performs the work directly, bypassing the need for expensive, per-user SaaS subscriptions. This has sparked a repricing of "knowledge work" stocks, with markets now betting that AI will act as a deflationary headwind for revenue rather than a tailwind. **Market Rotation: Atoms Over Bits** A distinct capital rotation is underway. As software stocks face compression, funds are flowing into physical sectors and energy, a trend described by strategists as "Atoms over Bits." While software valuations compress, sectors linked to the physical infrastructure required to *power* AI—such as energy and hardware—are outperforming. The market is effectively moving from funding the *tools* (software) to funding the *fuel* (energy and compute) needed to run the AI that replaces those tools. This marks a pivotal moment where the "guaranteed" recurring revenue models of the last decade are being stress-tested against a new reality of AI-driven automation.