Wall Street concerns about the impact of artificial intelligence-driven disruption on software companies spread to Asia on Wednesday, with the region’s technology stocks tracking losses among their U.S. peers.

Japanese software companies in Asia led the region’s losses. TISShares of major Japanese information technology service providers and systems integrators plunged more than 15%. Trend Micro fell by more than 8%, while NS solution down nearly 7%.

Share prices of Indian IT companies also fell, Beautiful IT index down nearly 6%. Major IT companies Tata Consultancy Services and Infosys Decreased 5.8% and 6.2% respectively hydrochloric acid down 5.5%

Indian IT companies were among the top gainers on Tuesday after announcing a trade deal with the United States.

Chinese software companies were also sold off. China stocks Kingdee International Software Plunged more than 15%, while cloud major Tencent down 3.27%. Alibaba fell by more than 1%, while Baidu fell more than 2%.

“Artificial intelligence has turned technology into a more competitive sport,” said Ed Yardney, president of Yardney Research.

“Software stocks were particularly hard hit as Anthropic rolled out new tools for its Cowork product,” he said. “It’s too early to tell how useful the new tools will be, but investors decided to lower valuation multiples on software stocks.”

Software companies once valued for their sticky subscriptions and reliable renewals are now under scrutiny as artificial intelligence has the potential to automate workflows, squeeze pricing and lower barriers to market entry for new competitors.

Vey-Sern Ling, senior equity adviser at UBP, said: “To re-evaluate the industry, companies must prove that AI can serve as a growth driver and not just a competitive threat – which may take longer than usual in the face of skeptical investors.”

Ling said UBP prefers infrastructure software with lower risk of AI disruption, as well as cybersecurity with pricing capabilities and AI that could potentially drive upsell opportunities.

Overnight in the U.S., stocks Immediate service It plummeted nearly 7%, and its year-to-date loss reached 28%. salesperson It has also declined by about 7%, and by 2026 the decline will be close to 26%. IntuitShares of TurboTax’s parent company fell nearly 11% and are down more than 34% so far this year. These moves boost tech stocks Nasdaq Composite Index It fell 1.4% on Tuesday.