Daybreak - Did Claude Cowork trigger a real “SaaSpocalypse” or is it overkill?

Episode Date: February 11, 2026

In early February, Indian IT stocks crashed 6% in a single day—the worst selloff in six years. ₹2 lakh crore vanished. Wall Street lost $300 billion.The trigger? Anthropic launched Claude Cowork, an AI agent that can organize files, parse spreadsheets, and write reports autonomously. For the first time, AI doesn't just assist—it executes entire workflows with minimal supervision. Investors panicked, and experts coined the term "SaaSpocalypse." But is this really the end of software companies, or are we watching an overreaction? Today, host Rachel Varghese unpacks both sides.Tune in.Listen to our episode on Deloitte's AI blunder here. If you have any thoughts on this episode write to us at [e-mail] with Daybreak in the subject line. You can also leave us a comment on our website or the YouTube channel here.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get alert, as soon as we release our first studio. episode, please follow intermission on Spotify and Apple podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. In the first week of February, stock markets across the world, but especially in India and the US, saw an anxiety-inducing phenomenon. Starting on Tuesday and continuing on to Venice Day, Indian IT stocks saw the worst sell-offs in recent memory.

The Nifty IT index logged its most dramatic single-day fall in six years, dropping nearly 6% and losing almost 2 lakh crore rupees. India's five biggest IT names, InfoS, TCS, WIPRO, HCL Tech and Tech Mahindra, all lost between 5 and 8% each in a matter of hours. Like I mentioned earlier, these tips were mirroed in the U.S. as well, especially in companies like Accenture and Cognosin. Also, Wall Street's tech-heavy NASDAQ fell by almost 3% between Tuesday and Thursday, and software stocks also fell by approximately $300 billion in market value. Now, if you've been following the news, then you might know

what triggered this mass panic sell-offs. But still, here's a quick recap. Anthropic, the AI company that's also a massive competitor to Open AI rolled out a set of plugins for its clawed co-work agent towards the end of January. But these features, even as they created excitement with tech enthusiasts, confirmed something for investors

who were already nervous about the effect AI would have on software companies. Because co-work is nothing like the chatbots we've all gotten used to so far. It's no longer just a prompt and response sort of deal. With co-work, you can actually automate AI to complete tasks across legal, finance, sales and marketing, and it will do all of that with minimal supervision. It almost works like a digital assistant on your computer.

You could ask it to do something very simple, like sort files in a folder. Or you could ask it to do something more complicated, like parse through an Excel sheet and write up a dock with the key insights. For the first time, AI can now take. on complex tasks end to end from planning and executing to delivering results and it no longer needs a person to guide each step. It just needs you to do a quick review and click for approval, which means that Anthropics' latest AI capabilities pose a direct challenge to Indian IT's main revenue streams. As you probably know, SaaS or software as service companies basically work by selling access to software over the internet. It's usually through broadband. It's usually through

browsers and they charge a recurring subscription fee instead of a one-time license. In return, customers get a product that's constantly maintained, updated and approved. They don't have to manage any of it by themselves. So, when Anthropic launched these tools that automate all sorts of business tasks, the fear was that AI would only grow in capability and eventually make SaaS products and the human teams that run them obsolete. And the sell-offs that resulted from this concern even earned a dramatic name from Jeffreys, an investment bank and financial services company, which is Saspocalypse.

Now, some experts believe that this is certainly an inflection point for AI, because it seems to be moving past the whole AI-enabled, AI-assisted identity. As an E.T article put it, AI isn't just enhancing existing products anymore. It is directly competing with them. But some critics also believe that the furor is premature and perhaps even overblown. Welcome to Daybreak, a business podcast from the Kent. I'm your host, Rachel Wurkees, and every day of the week, my co-host, Niktha Sharman and I will bring you one new story that is worth understanding and worth your time.

Today is Wednesday, the 11th of February. So why exactly has Claude Co-work amped up the anxieties about AI competing with SaaS companies? Well, for one, an AI agent like co-work simplifies the very complexities that SaaS companies have monetized over the years. Fragmented systems, customized requirements, and labor-heavy processes all created sustained demand for these services. So when one system can do all of the integrating, understanding and executing, the entire stack of software that sits on top of that complexity starts to look redundant. Here's three ways how co-work is disrupting these softwares. Firstly, you don't have to be a developer to use it. You don't have to write a piece of code that instructs the AI on what to do.

You can ask it in simple English to perform a task like create a sales report from this. And it will just do it. It can fetch the data, format it, and even create a PDF with charts and notes. So the barrier to entry is very low and needs little to no trouble. training, which means it reduces the need to hire someone else outside the organization to do the business tasks that the AI can do almost all by itself. Secondly, a lot of SaaS platforms do certain things very well, like analyze data, manage workflows, and generate reports. And it does that usually through a platform that has been integrated already

with all these different tools that perform different functions. Now, AI can do all of that through basic commands without the need for a dedicated platform. Ideally, given the right permissions, it can read a document on Notion, update your Google Drive and search the web for more information on the way. It doesn't need to be penned into one platform to perform all three functions. So, why would someone pay for a specialized tool when your AI agent can handle it by using a combination of open source or free tools? Third, it reduces the importance of use.

our UX design. Think about it. We all have our favorite browsers, payment apps or food delivery apps, despite multiple options, because we simply like the user interface and user experience of one over the other. Because we're human and of course we'll have preferences based on our own sense of aesthetics and convenience. Of course, AI doesn't care about any of that. It's going to interact with the code of a software or website, which means a feature that was important to maintain customer stickiness could gradually become useless. So all these modes that SaaS companies have built, like specialized teams, proprietary integrations and even design, are slowly losing their importance.

There's also an added sense of discomfort in the fact that Claude Co-work was actually built with the help of Claude itself. What would have taken quarters took only a couple of weeks to develop, because AI shrank the development cycle drastically, which means organizations that use AI to build AI can do it much faster and actually even improve their AI's capabilities in the process through the consistent feedback loop. So, the nerve-wracking thing for SaaS companies now is that, of course, AI companies have a head start on them. But there's also some good news. Most of the legacy SaaS companies have already been doubling down on increasing their own AI capabilities.

More on this in the next segment. As more incumbent companies embrace the new technology and leverage their own decades of experience in perfecting their processes with AI, they're not just likely to survive, but to thrive. See, when it comes to business matters, especially when you think about things like confidentiality and accountability, it's very necessary to have humans in charge of the major processes. Experts believe that clients who have long-standing relationships with trusted service providers are unlikely to cut off ties with them just to sign over sensitive information and years of insight to a bot. Anisha Chalia, a partner at Andrew Sin Horowitz, an American venture capital firm, told Wall Street Journal that the software costs are only about 8 to 10% of what companies spend.

Basically, any money saved by vibed coding wouldn't exactly be worth the legal and compliance risk for most companies if there happened to be any errors. Financial Times reported that it's also actually quite early and a lot to expect companies to embrace new technologies on a large scale. In fact, data from the US Census Bureau from August last year showed that AI adoption had actually been declining, especially in bigger companies, with more than 250 employees. The thing is, it pays to be more careful with legal, regulatory and security risks, because blaming the AI for mistakes is not really an acceptable answer in case anything goes wrong. Take the situation with Deloitte last year in Australia. A story we covered on daybreak actually, which I'll link in the show notes.

See, Claude Co-work doesn't just live on a tab on your browser. If an enterprise is paying for the tool and using it to its own, full capacity, then it would be living on an employee's device, and it would need to have intimate access to all sorts of proprietary information, data and critical documents to actually do any work. It's not easy to hand over these kinds of permissions because this was a very hasty tech development, which means a lot of it has happened without the necessary card rails and governance in place. It's also why the terms and conditions for co-work say that you shouldn't really be using co-work for sensitive work. For example, Anthropics disclaimer for its legal plug-in states that all

outputs should be reviewed by licensed attorneys. So it's clearly positioning itself more as an assistant than an expert. The way co-work is designed is also very dependent on interacting with humans. Not at an instructional level, yes, but certainly at an approval level. At key points when it comes to carrying out tasks, it is required to ask the users for authorization and review to make sure that mistakes are minimized. So basically, people are mostly being moved from an execution role to a supervisory one. And what that means is that it's unlikely that co-work or tools like it are actually going to put SaaS platforms out of business. At least, that's not happening any time soon. Could it remove inefficient layers from the platforms and smoothen, like repetitive workflows,

though? Sure. But what's more likely is this, that AI will push incumbent companies into restructuring their own offerings around AI so that they don't get left behind. In this case, their responsibility then is to ensure that they do so effectively and efficiently. Because while AI is allowed to assist and execute basic tasks, it is the human ability. to perceive and judge brand identity, quality and customer experience that will set SaaS and Gumbits apart from the AI disruptors. Daybreak is produced from the newsroom of the Ken India's first subscriber-focused business news platform.

What you're listening to is just a small sample of our subscriber-only offerings. A full subscription offers daily long-form feature stories, newsletters and a whole bunch of premium podcasts. To subscribe, head to the Ken.com and click on the red subscriber. button on the top of the Ken website. Today's episode was hosted and produced by my colleague Rachel Virgis and edited by Rajiv Sien.