State of AI: February 2026 newsletter
State of AI: February 2026 newsletter Software stocks crater as agentic AI rewrites the playbook. Plus: Moltbook's AI theatre, OpenClaw's 157K-star security mess, and HBM runs out. Dear readers, Welcome to the latest issue of the State of AI, an editorialized newsletter that covers the key developments in AI policy, research, industry, and start-ups over the last month. First up, a few reminders: AI meetups: Join our upcoming AI meetups in Munich (17 Feb ‘26) for the Munich Security Conference and Zurich (19 Feb ‘26), as well as in Paris (11 Mar ‘26) and SF (28 Apr ‘16). RAAIS 2026: Join our 11th Research and Applied AI Summit in London on 12 June 2026, the premier global meeting for learning AI best practices and what’s coming next. Air Street Press featured the Air Street Capital Year in Review 2025, how embodied AI is hitting its stride, whether AI can discover new science, AI progress into 2026, what European defense must do in 2026, and mega rounds at portfolio companies Black Forest Labs and Synthesia. Take the State of AI usage survey: You can submit your usage patterns to the largest ongoing open access survey, which now has over 1,400 respondents :-) Looking for a new challenge? Lots of our companies are hiring, just drop me a line. I love hearing what you’re up to, so just hit reply or forward to your friends :-) The $300B dislocation The gap between what AI systems can now do and what the market thinks that means has never been wider. Nearly $285B in market capitalisation has been wiped from software stocks in the space of two weeks. The S&P 500 software and services index is down 26% from its October peak. The Goldman Sachs software index suffered its worst single-day drop since the last round of forced selling during trade tensions. Hedge funds have piled in, shorting $24B in software names this year alone. Meanwhile, frontier model releases are arriving at a cadence that feels less like a product cycle and more like an arms race. The trigger was ostensibly Anthropic’s launch of Claude Cowork in January, a system-level agent that navigates computer interfaces, manipulates local files, and executes multi-step business workflows autonomously. When Anthropic followed up with specialised plugins for marketing, law, and finance, the narrative flipped overnight from “AI as productivity booster” to “AI will replace your SaaS.” Then came the duelling model launches. Anthropic released Claude Opus 4.6 with a 1M-token context window, state-of-the-art scores on Terminal-Bench 2.0 and Humanity’s Last Exam, and the ability to spin up and coordinate parallel agent teams. Minutes later, OpenAI dropped GPT-5.3-Codex, the first model that was instrumental in building itself and which OpenAI treats as its first High-capability release in the cybersecurity domain. Both companies originally scheduled their reveals for 10:00 a.m. PST. Anthropic moved 15 minutes early. OpenAI matched instantly. The selloff signals the existential question: how can investors underwrite the next ten years of technology companies? SaaS companies have traded at…