US software stocks slide as AI disruption fears intensify

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U.S. software stocks fell sharply on Thursday as disappointing outlooks from major players deepened investor concerns that traditional software providers are being overtaken by artificial intelligence-driven competitors. Weak sentiment was triggered after Germany-based SAP issued an underwhelming cloud outlook, while ServiceNow shares dropped despite forecasting stronger subscription revenue.

Investors are increasingly worried that advances in AI, including the rapid and low-cost generation of software code and applications, could undermine the subscription-based software-as-a-service business model. Several high-profile U.S. firms saw steep losses, including Salesforce, Adobe, and Datadog, as the sell-off spread across the sector.

The pressure was compounded by concerns over heavy AI spending. Microsoft reported record AI investment alongside slower cloud growth, sending its shares sharply lower. Analysts said markets are pricing in a worst-case scenario in which AI fundamentally reshapes the software industry faster than incumbents can adapt.

Software stocks were among the biggest decliners on the Nasdaq, while chipmakers and memory firms continued to benefit from AI-driven demand, highlighting a widening divide between hardware and software winners in the AI race.

Open-source AI models exposed to criminal misuse, researchers warn

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Open-source artificial intelligence models are increasingly vulnerable to criminal misuse, as hackers can take control of computers running large language models outside the safeguards used by major AI platforms, according to new research released on Thursday. Researchers warned that compromised systems could be used for spam campaigns, phishing, disinformation, fraud, and other illicit activities while evading standard security controls.

The study was conducted over 293 days by cybersecurity firms SentinelOne and Censys, and examined thousands of internet-accessible deployments of open-source large language models. The researchers identified a wide range of potentially harmful use cases, including hacking, harassment, hate speech, theft of personal data, scams, and in some instances severe illegal content. They said hundreds of models appeared to have safety guardrails deliberately removed.

While thousands of open-source AI variants exist, a significant share of publicly accessible systems were based on models such as Meta’s Llama and Google DeepMind’s Gemma. The analysis focused on models deployed using Ollama, a tool that allows organizations to run their own AI systems. System prompts were visible in about a quarter of observed deployments, and 7.5% of those prompts could potentially enable harmful activity.

Researchers said roughly 30% of the identified systems were hosted in China and about 20% in the United States. Industry experts stressed that responsibility for mitigating risks must be shared across developers, deployers, and security teams, warning that unchecked open-source capacity poses growing global security concerns.

Comcast loses more broadband customers as competition intensifies

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U.S. cable and media group Comcast reported a steeper-than-expected decline in broadband subscribers in the fourth quarter, highlighting mounting pressure on its core connectivity business. The company said it lost 181,000 broadband customers, exceeding market expectations, as rivals attracted users with aggressive pricing and alternative internet options.

Competition in the U.S. broadband market has intensified with the expansion of high-speed fiber networks and the growing availability of lower-cost fixed-wireless access services. These offerings have challenged long-established cable providers, forcing Comcast to adjust its strategy. The company said it will hold prices steady this year while revamping service bundles and offering free mobile lines to retain customers.

Despite these efforts, analysts do not expect meaningful broadband customer growth until 2027. Comcast said it aims to convert a significant portion of free mobile-line users into paying customers later this year.

Overall revenue for the quarter reached $32.31 billion, broadly in line with expectations. Results were supported by strong performance at the company’s theme parks division, which posted its best quarter on record, driven by Epic Universe in Orlando. The Peacock streaming service also added subscribers, though higher sports-related costs widened losses.