The rise of AI agents is disrupting the traditional software sector, with a record number of public software firms now citing them as a competitive risk. This concern is reflected in market performance, as a major software ETF has declined significantly year-to-date, indicating investor apprehension about the technology’s long-term impact on business models and revenue.
The growing capabilities of artificial intelligence are causing concern within the software industry. A record 27 U.S. public software firms identified AI agents as a competitive risk in their regulatory filings for the first quarter of 2026.
This number has more than doubled since the second quarter of 2025, according to data shared by The Kobeissi Letter. For comparison, only two companies flagged this risk in the fourth quarter of 2024.
Companies like Anthropic and OpenAI are developing advanced AI “superagents” that can operate enterprise software autonomously. “AI agents could replicate existing software or reduce subscription revenue, as companies that need fewer employees also need fewer software licenses,” the analysis stated.
This perceived threat is already impacting financial markets. The Software ETF, $IGV, is down 21% year-to-date as investors adjust their expectations.
“Investors are already pricing in the risk,” the report noted, linking the drop directly to the emerging AI disruption. Technology leaders have previously commented on this industry shift, with Elon Musk stating that AI-generated content will eventually dominate.
