Software Selloff Continues as AI-Impact Worries Grow | Bloomberg Tech 2/11/2026

Terminal value questioned

Portfolio manager Ankur Crawford warns that AI's ability to write software collapses creation costs, making it impossible to apply traditional valuation multiples to legacy vendors.

Indiscriminate selling hits leaders

Shares of Charles Schwab, Shopify, Intuit, and Raymond James plunged alongside smaller names as investors punish any company perceived to be in AI's "crosshairs."

Point solutions face extinction

Small and mid-cap niche software providers are particularly vulnerable because AI enables larger adjacent businesses to effortlessly usurp their end markets.

Explosive token growth

AI token consumption grew 25% month-over-month in January, implying a 14-fold annualized increase that necessitates massive sustained capital expenditures.

Hardware/software divergence

While software stocks selloff, chip and infrastructure players remain resilient as hyperscalers continue aggressive capex to support intelligence processing demand.

Early innings of adoption

Despite market volatility, the industry remains in the initial phases of AI integration, suggesting years of infrastructure investment are still required.

Record-breaking valuation target

Bloomberg Intelligence estimates the combined entity could IPO at $250-$500 billion, using public markets to fund AI training runs competitive with OpenAI.

Revenue breakdown reveals scale

SpaceX generates approximately $18-20 billion annually ($10B launch, $8B Starlink), while xAI's $5 billion run rate significantly trails larger rivals.

Integration and departures

The merger aims to deploy AI across Tesla's 10-million vehicle fleet, though the recent exit of multiple xAI co-founders signals internal restructuring.

Conversational commerce launch

Google's new AI Mode allows users to complete transactions directly within search chats, eliminating friction between product discovery and purchase.

Direct Offers pilot program

The company is testing a new ad format where retailers provide personalized discounts that AI matches to shopper queries in real-time.

Ad format evolution

After 25 years of search advertising, Google is reimagining ad placements for conversational interfaces to ensure relevance without disrupting user trust.