The software sector, which powered the digital economy for decades, now faces a serious challenge. The adoption of autonomous “agent” AI tools has triggered a rapid re-pricing of assets. In a new Goldman Sachs report, “Top of Mind,” investors express grave concern that AI could “eat” the industry that created it by automating the coding process.

Despite the panic, Goldman Sachs analysts believe that established market players still have resilience. Deep integration into corporate workflows, vast troves of amassed data, and long‑term client contracts create protective barriers. Gabriela Borges of Goldman Sachs notes that industry giants are adapting as “fast followers,” embedding AI capabilities into existing platforms, so they do not cede their market share to aggressive startups.

However, Rick Sherlund of Sherlund Partners warns that having time to adapt does not guarantee success. The question is how radical the transformation companies must undergo to survive in a world where the cost of producing code is collapsing toward zero.

Investors are taking the approach of ruthless selectivity in the stock market. Market participants are no longer buying the sector as such; they choose firms that can demonstrate real AI monetization and steady earnings. Experts say software companies need to show a clear path to productivity gains from neural network integration to stabilize their stock quotes.

Despite the collapse in market value of many tech heavyweights, Goldman Sachs does not see a systemic threat to the credit market. Analysts emphasize that stress in tech bonds is unlikely to trigger a wave of defaults. Still, a fundamental shift is underway: as automation devalues the act of writing software, economic value is moving from the code itself to the intelligent services the platform provides.

Investors have absorbed the message: the market is splitting. Those unable to adjust their cost structures and product lines to the reality of agent‑based AI risk becoming obsolete.