Bridgewater Associates warns that artificial intelligence poses an existential threat to legacy software companies, citing Claude Code as a disruptive force similar to Amazon's impact on bookstores.

Bridgewater co-chief investment officers Bob Prince, Greg Jensen and Karen Karniol-Tambour wrote in a client note that the latest release of Claude Code has created significant risk for major businesses. Enterprise software, CRM, and creative design companies have been particularly affected, with Salesforce down 33% year-to-date, Adobe declined 30%, ServiceNow dropped 41%, Intuit fallen 37.5%, and HubSpot down 39%.

The S&P 500 Software and Services Index has fallen 16.6% this year amid concerns that newly released AI models could upend traditional software companies. Bridgewater stated that "companies will either co-evolve with AI or face disruption."

Layoffs have been rising across sectors, from big tech to financial services, with companies cutting thousands of jobs and citing cost-savings from AI deployment.