OpenAI claims its artificial intelligence program can replace some of the world’s biggest software companies, including Sydney-based Atlassian.
Executives from the companies that developed ChatGPT gave a presentation to potential investors last week, claiming the software would replace software sold by Atlassian, Workday, Adobe, Slack and Salesforce, US technology news website The Information reported.
Nasdaq-listed Atlassian’s share price has fallen 20 per cent since OpenAI claimed it would wipe out 76 per cent of the company’s valuation, or $36.4 billion ($51 billion), in a feared 12 months.
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The S&P/ASX 200 index’s historic decline in tech stocks widened on Tuesday on concerns about AI-related disruption, with the S&P/ASX 200 tech index down 3.6%, taking its decline over the past month to 23.7%.
The technological disaster sent software bellwethers Wisetech and Zero down 3.9% and 4.6%, respectively, on Tuesday.
“We believe AI is great for Atlassian,” said Atlassian founder Mike Cannon-Brooks, who also agreed in February to pause plans to sell stock since the company’s initial public offering in 2015.
Investors are concerned about whether AI platforms like OpenAI and Anthropic can replicate Atlassian’s products at a lower cost for customers.
Analysts believe that Atlassian customers’ tech employees will be laid off as AI starts completing tasks. This reduces demand for Atlassian’s workflow management products, such as Jira and Confluence, which are sold per seat or per individual employee user.
An Atlassian spokesperson said the company would consider responding to the allegations, but did not receive a response at press time.
Alex Pollack, founder and chief investment officer at Loftus Peak, said the risks of AI are real but may be overvalued in software-as-a-service (SaaS) businesses, including Atlassian.
“It’s much more than just writing code in 20 minutes that allows AI to replace these models.” [SaaS] Business,” he said.
“AI code has no guarantee that it will work in all situations and countries, that it will be secure, and that it will be updated 24/7 as needed.
“So AI is very useful, but it’s not the end of the SaaS business model. The way some people are portraying the potential of AI today is actually a recipe for corporate anarchy, and that’s not going to happen.”
In its earnings report on February 5, the Sydney-based company announced a 23% increase in revenue to $1.6 billion in the December quarter and boasted that AI had improved productivity for its business customers.
OpenAI is targeting $280 billion in revenue by 2030 and aims to raise $100 billion from investors.
Some analysts believe that the software sell-off will be driven by a report by U.S. investment research group Citorini that predicts the U.S. unemployment rate will rise above 10% by 2028 as AI replaces human labor, leading to a sharp fall in stock prices over the next 24 months.
Pollack said the report was sensational and Tuesday’s market reaction was nervous given it was driven by one strategist’s future speculation.
“that [Citrini] This work was not correct and seemed more like fiction. But it’s a pretty volatile market,” he said.
By Tuesday afternoon, the selling spread to tech stocks and risk bellwether Bitcoin, which fell 3.5% to $63,000, down 50% from its peak of more than $126,000 last October.
