On Wall Street, the spread of anxiety about artificial intelligence (AI) is severely impacting the stock prices of companies that could be harmed by the technological wave. From small software firms to large wealth management institutions, none have been spared.

The latest round of selling erupted abruptly on Tuesday when an obscure startup, Altruist Corp., launched a tax strategy tool, causing shares of Charles Schwab, Raymond James Financial Inc., and LPL Financial Holdings Inc. to plunge by 7% or more.

This marks the steepest decline for some stocks since the market downturn triggered by trade tensions last April. Yet, it is merely another example of the rapid spread of a "sell first, ask questions later" mentality. As hundreds of billions of dollars flow into the AI sector and begin transforming into commercial products, concerns about AI potentially disrupting entire industries are surging like a tide.

"Almost any company facing the risk of being impacted is being sold off indiscriminately," said John Belton, a fund manager at Gabelli Funds.

In recent years, AI advancements and breakthroughs have consistently led Wall Street trends, with technology stocks driving market gains. As equities climbed to record highs, the market has continually questioned whether this represents an impending bubble or a productivity revolution poised to reshape the corporate landscape in the United States.

Since the beginning of last week, sporadic AI product launches have triggered a tsunami of effects. Investors are no longer focused on identifying potential winners but are instead rushing to avoid companies that face even the slightest risk of being displaced by technological change.

"I don't know what will happen next," stated Will Rhind, CEO of Graniteshares Advisors.

"Last year, the situation was that we all believed in AI but were still searching for practical applications," he said. "Now, as we see these applications becoming increasingly powerful and persuasive, the disruptive impact is following."

The software industry has long been troubled by concerns about AI. Last week, these worries began to spread more widely to other sectors, as new tools introduced by Anthropic PBC sparked selling waves in stocks across software, financial services, asset management, and legal services.

On Monday, a new application launched by online insurance platform Insurify, which uses ChatGPT to compare auto insurance rates, severely hit the shares of U.S. insurance brokerage firms. On Tuesday, wealth management company stocks collectively plummeted, triggered by Altruist's new product, Hazel, which helps financial advisors tailor investment strategies for clients.

Jason Wenk, CEO of Altruist, remarked that the intensity of the stock market reaction even surprised him, with several investment firms losing billions of dollars in market value. He noted that this indicates the competitive threat his company poses.

"People are gradually realizing that the architecture we used to build Hazel can replace any role in the wealth management field," he said in an interview. "These tasks typically require an entire team to complete. Now, with AI, they can be efficiently handled for just $100 per month."