Google CEO Pichai Says Market Overreacted to Anthropic’s AI Launch

Sundar Pichai said the sell-off in cloud and software stocks was driven by fear, not real disruption from AI.

Google CEO Sundar Pichai has expressed concern over what he sees as an exaggerated market response to Anthropic’s recent AI solutions as cloud-based software shares took a hit on Thursday. At Google’s quarterly earnings mill, Pichai stated that investors were overreacting to the potential disruption caused by the new AI capabilities introduced by Anthropic and that artificial intelligence should be viewed as an opportunity to enhance existing products, not replace them instantly.

According to Pichai, AI enabled other existing products like Google Search and YouTube, and as companies incorporate AI technologies into their offerings, similar opportunities will arise for those businesses. Pichai’s remarks are part of a more extensive response from the tech industry regarding what executives have characterized as irrational market behavior.

Anthropic released new AI-powered Cowork Claude plugins this week, with the most press coverage surrounding the legal-focused plugin. Following claims about the ability to perform such functions as contract review and compliance checks with little effort required by human beings, concerns arose among traditional software and service companies regarding competition and uncertainty in terms of future demand for products.

Nvidia's CEO Jensen Huang referred to the recent sell-off as being "the most irrational thing imaginable," suggesting that AI companies do not provide replacements to core technology infrastructure but rather exist in conjunction with it. Thus, technology leaders strongly advise their respective employees to remain calm and assure them that the integration and knowledge of development processes within the technology industry will remain foundational throughout the evolution of the technology industry as AI continues to evolve.

Most financial analysts agree that the current market return will likely reflect the uncertainty surrounding AI's effect on the future value of the companies in the industry as opposed to a one-time change in the future fundamental value.