The world-leading AI company just threatened one of Australia’s great tech successes, Atlassian
Shares in the Sydney-founded company joined a tech stock rout Tuesday, on worries they will lose business to artificial intelligence giants such as OpenAI, which owns ChatGPT
OpenAI has claimed its artificial intelligence programs will be able to supersede some of the world’s biggest software companies, including Sydney-founded Atlassian.
US tech news website The Information reported executives from the company behind ChatGPT gave a presentation to potential investors last week, and claims they will replace software sold by Atlassian, Workday, Adobe, Slack, and Salesforce.
Shares in Nasdaq-listed Atlassian have slumped 20 per cent since OpenAI made its claims, extending a horror 12 months that wiped 76 per cent, or $US36.4 billion ($51b), off its valuation.
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By continuing you agree to our Terms and Privacy Policy.On the S&P/ASX 200 a historic rout in tech stocks extended on Tuesday on worries about disruption linked to AI, with the S&P/ASX 200 Tech Index plunging 3.6 per cent to take its loss over the past month to 23.7 per cent.
The tech wreck saw software bellwethers WiseTech and Xero lose 3.9 per cent and 4.6 per cent respectively on Tuesday.
Atlassian founder Mike Cannon-Brookes has said he is “convinced AI is great for Atlassian” and even agreed to pause his share selling plan in February, which had been in place since its 2015 initial public offer.
Investors are worried that AI platforms like OpenAI or Anthropic will be able to replicate Atlassian’s products at a lower cost for customers.
Tech employees at Atlassian’s customers will be laid off as AI starts to complete their work, analysts believe. This in turn will lower demand for Atlassian’s workflow management products such as Jira or Confluence that is sold on a per seat or individual employee user basis.
A spokesperson for Atlassian said it would consider a response to the claims, but didn’t provide one by the time of publication.
Alex Pollack, the founder and chief investment officer of Loftus Peak, said he believes the AI risk is real but is likely overhyped for software-as-a-service (SaaS) businesses including Atlassian.
“There’s a truck load more to it than just AI writing a piece of code in 20 minutes that can supplant the model of these [SaaS] businesses,” he said.
“The AI code doesn’t come with an imprimatur that it can work in all circumstances, countries, is secure, and will be updated 24/7 as necessary.
“So AI is tremendously useful, but it doesn’t end the SaaS business model. The way some people are painting AI’s potential today is really just a recipe for corporate anarchy and not going to happen.”
At its earnings report on February 5, the Sydney-founded company said its December quarter sales jumped 23 per cent to $US1.6b and it boasted AI improves productivity for its corporate customers.
OpenAI is looking to raise $US100b from investors as it targets $US280b in sales by 2030.
Some analysts blamed the latest software sell-off on a report from US investment research group Citrini that said the US jobless rate will top 10 per cent by 2028 as AI replaces human labour, with shares set to nosedive over the next 24 months in response.
Mr Pollack described the report as sensationalist and the market’s reaction on Tuesday as nervous given it’s being moved by a single strategist’s future guesswork.
“That [Citrini] piece didn’t seem right, more like fiction. But it’s a pretty skittish market,” he said.
Elsewhere, the selling extended to tech and risk bellwether Bitcoin on Tuesday afternoon, as it lost 3.5 per cent to $US63,000 to mark a 50 per cent fall from its peak above $US126,000 last October.
