The Great Unwinding

Welcome to the restructuring

Author

Malcolm Frank, CEO
April 28, 2026

The Great Unwinding

This past week clarified a lot.  For a generation, SaaS and IT Services dominated enterprise technology. Then, AI took a knife to both of them.

Across both categories, roughly $180 billion in combined market cap was erased in five trading days. This was not a normal correction; it represents a structural reset of valuations.  And in the same breath, Google and AWS announced a combined $65 billion of fresh investment into Anthropic. The old enterprise tech model is cratering. The new one is being built. Rapidly.

Analysts warned that Infosys' weak guidance "reiterates the seriousness of AI-led deflation — and this could just be the beginning of what's to come."  This long-anticipated deflation of the labor-centric model is now becoming real, as clients aren't waiting for existing contracts to expire.  Instead, they're abandoning SaaS implementations and modernization projects mid-stream because AI does the work faster and cheaper. Why pay for the army when the agent costs pennies? HCL lost 16.6%, Infosys 12.4%, Tech Mahindra 10.1%, Cognizant 9.8%, Accenture 9.1% and TCS 7.2%. 

Similarly, ServiceNow suffered its worst single day on record, sinking roughly 18%, while Salesforce, Workday, Adobe, and Oracle also fell sharply. IBM lost $28 billion in market cap. And privately-held Medallia was handed over to its creditors, wiping out another $5.1 billion. The fear driving the selloff cuts to the heart of the SaaS bargain: for decades enterprises bent their businesses to fit standardized platforms and paid dearly for the privilege. Now AI lets them build proprietary tools that bend to them, at a fraction of the cost. That's not a product problem; it’s an architectural one. 

Meanwhile, Meta and Microsoft announced mass layoffs (a combined 17,000 employees), reallocating capital toward an AI-first model. 

The good news?  With AI, end customers (e.g., the Fortune 500) are becoming increasingly technology-centric, and thus will be buying more units of software and associated services than ever.  However, AI deflation is moving faster than anticipated, cutting out the economic knees of the past generation providers.  Welcome to the restructuring.  

Indian IT services sector gets whacked by AI

75 of 80 stocks on the Bombay Stock Exchange IT index had a rough week. “AI deflation” becomes the key concern, as AI drives the unit cost of services delivery lower.  Infosys, Coforge, Mphasis, HCL Tech, KPIT, Persistent, LTM, and TCS all hit hard.

The SaaSocaplyse continues: ServiceNow and IBM earnings reignite AI fears, sending software shares lower

NOW + IBM erase a combined $36 billion of market cap in one day. 

Meta to cut one in 10 jobs after spending billions on AI

8,000 employees to be let go as Meta prioritizes AI infrastructure over its traditional workforce.

Microsoft reshapes workforce, offering buyouts to nearly 9,000 employees as It pours billions Into AI

Inside the “Rule of 70”: Microsoft’s aggressive plan to lean out its senior workforce and redirect capital toward AI.

Google to invest up to $40 billion in Anthropic as search giant spreads its AI bets

Comes on the heels of AWS’s $25 billion commitment to Anthropic.

Reinventing marketing workflows with agentic AI: McKinsey

Marketing, a fully knowledge-based and inherently probabilistic function, is ripe for AI transformation. How to do it. 

They quit Bain, McKinsey, and BCG to be AI founders, and had to unlearn consulting fast

Consulting gave them the network, but building gave them the reality check. Meet the MBB alumni unlearning corporate polish to survive the cutthroat world of AI entrepreneurship.

AI can cost more than human workers now

"For my team, the cost of compute is far beyond the costs of the employees," says Bryan Catanzaro, vice president of applied deep learning at Nvidia.

CIOs struggle to find clarity in their organizations’ AI strategies

The State of the CIO survey finds confusion around defining corporate AI strategy and who is responsible for meeting AI goals.

AI-powered Solution of the Week:
Competitive & Market Intelligence

Competitive & Market Intelligence continuously monitors the signals most relevant to your business and delivers timely, synthesized briefings so your team stays informed without spending hours reading everything to find the things that actually matter.

Prestigious Wall Street law firm humiliated when its AI use is discovered in court

Sullivan & Cromwell has egg on its case.

Harvard students’ AI usage: by the numbers

A survey of over 300 Harvard students shows more than a third of students use AI in ways they identify as being against course policies.

An amateur just solved a 60-year-old math problem—by asking AI

AI used to be bad at math. No more, as ChatGPT has proved a conjecture with a method no human had thought of. Experts believe it may have further uses.

Anthropic created a test marketplace for agent-on-agent commerce

The pilot program, called “Project Deal,” surprised Anthropic with “how well it worked.”

And one more thing…

AI is making it very easy for the government to spy on you. Some lawmakers are worried.

AI’s increasing ability to sift through data and track Americans’ locations has some lawmakers reconsidering parts of the Foreign Intelligence Surveillance Act.

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