Hello there.

Happy Friday! Hope you made it through that market selloff this week.

This week:

Where do we go from here? Let’s find out.

In partnership with GuyStocks

Nvidia CEO Jensen Huang told everyone to calm down. Naturally, the market freaked out. In less than a week, nearly $1 trillion got wiped off software and services stocks as investors collectively decided that AI isn't coming for software jobs someday. It's coming right now.

The spark was Anthropic rolling out plug-ins for Claude that can automate legal reviews, sales workflows, marketing tasks, and data analysis. Within 48 hours, Thomson Reuters, LegalZoom, PayPal, Expedia, Equifax, and Intuit all crashed by double digits. The US software index fell nearly 5% with 104 decliners and only nine risers, marking its sixth straight decline and dragging valuations back to April levels.

Nvidia's CEO tried to throw water on the fire at a Cisco event, calling the idea that software tools will be replaced by AI "the most illogical thing in the world." He argued that AI systems will use existing software tools, not replace them. The market wasn’t buying it.

When the guy who literally profits from AI adoption is telling you to pump the brakes on AI fear, and you ignore him anyway, that tells you something about the depth of this panic. Software companies built empires on recurring revenue from human expertise. When an AI agent can draft contracts and crunch data for a fraction of the cost, those subscription fees start looking a lot less sticky.

While public software stocks are getting obliterated by AI anxiety, private AI companies are swimming in money like Scrooge McDuck. OpenAI is raising up to $100 billion at a valuation of around $830 billion, and every tech giant on Earth is fighting to write a check.

Amazon is in talks to invest up to $50 billion. Nvidia is circling a $20 billion commitment that would be its largest investment ever. Jensen Huang, the same guy the market just ignored on software stocks, said Nvidia would consider participating in OpenAI's future rounds and even its eventual IPO. Microsoft is deepening its partnership. SoftBank is circling. Middle Eastern sovereign wealth funds are on the phone.

So Wall Street is simultaneously saying "AI will destroy the software industry" and "we must invest billions in AI companies at any price." The logic is that the destroyers will capture the value that the destroyed leave behind. Legacy SaaS companies move too slowly and carry too much bloat to adapt. And of course, the model builders have no loyalty to anyone's existing revenue streams.

For retail investors watching from the sidelines, this is… frustrating, to say the least. You can't buy OpenAI. It's private, and the $830 billion valuation train left the station without you. But the companies writing these massive checks (Nvidia, Amazon, Microsoft) are very much public, and if you’re a shareholder, then they’re gambling on Altman with your money. Whether those bets pay off at these valuations is anyone's guess. Right now, the only thing investors seem certain about is that standing still means getting run over.

In this episode of This Week in Tech, the panel dives headfirst into a surreal moment where AI agents get their own social network, tech giants blur the line between innovation and overreach, and the power dynamics shaping your digital life get a little harder to ignore.

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Till next time,
— Brandon and Blake