This article is a part of Poland Unpacked. Weekly intelligence for decision-makers
A sector-wide sell-off in IT companies highlights growing investor concerns that the rapid advance of artificial intelligence could curb demand for certain technology services. While markets may be overreacting, Poland’s significant exposure to IT and business services makes it worth considering the potential consequences of these shifts.
In recent days, software and IT service companies have seen sharp losses on the stock market. This phenomenon is increasingly being dubbed the “Cloud Crash,” referring to the collapse in valuations of firms providing cloud-based services. Yet it is part of a broader trend: the sell-off in these stocks has been underway for weeks, and in some cases even months. It affects not only the largest global giants but also smaller companies, including those based in Poland.
Since the beginning of the year, SAP has lost more than 18% (data as of February 5, 2026). Adobe is down 23%, Oracle 30%, Shopify 30%, Salesforce 34%, Intuit 34%, and AppLovin 44%. The list could go on. At the same time, the broader market remains stable: the S&P 500 is hovering around its level from the start of the year. This is therefore a classic sector-specific sell-off. The trend is visible on the Warsaw Stock Exchange (GPW) as well – Asseco Poland has fallen more than 18% since January.
Investors are offloading shares out of concern that the rise of artificial intelligence will sharply reduce demand for traditional IT services. This phenomenon warrants close attention, as it carries significant implications for the Polish economy. The IT sector and modern business services remain key engines of growth.
A historical analogy: More globalization than the internet
A natural reflex in the face of such profound change is to reach for historical analogies. In this context, the development of the internet – and, more broadly, digitalization – is often cited. The argument in its favor is that artificial intelligence represents another technological revolution in the realm of information. From an economic perspective, however, a more apt comparison may be the processes of globalization. The internet was primarily a communication shift – or, in management theory terms, a change in distribution channels. In itself, it did not generate additional labor supply.
Globalization in the latter half of the 20th century, by contrast, can be seen as a sudden surge in the supply of cheaper labor to developed economies. Advances in transportation allowed companies to relocate production to countries with far lower labor costs, a practice known as offshoring – which many eagerly embraced. Factory workers in the U.S. or Western Europe were replaced by employees in Mexico or China. The analogy can be extended further: textile workers in Łódź [WOO-dge; central Poland - ed.) were replaced by factory employees in Bangladesh, while workers in Poland’s automotive plants replaced their counterparts in Italy.
The process brought tangible benefits, primarily in the form of lower consumer prices. Over the long term, it also allowed developed economies to make more efficient use of their labor resources. More technologically advanced industrial sectors and modern services, including IT, flourished. Globalization became a driver of impressive economic growth in numerous countries – from China to Poland and across Central and Eastern Europe.
Yet the process was not without its downsides. Factory workers displaced by offshoring could not easily retrain for IT roles. In the short term, this led to sharp spikes in unemployment in many regions. Classic examples include the U.S. Rust Belt and the Midlands in the U.K., and, to some extent, Łódź – though there the legacy of the post-communist transition also played a significant role.
Explainer
Łódź: From textile powerhouse to post-industrial phoenix
In just eight decades during the 19th century, Łódź exploded from a village of 4,000 into one of Europe’s leading textile centers with over half a million residents. Known as the “Polish Manchester,” the city attracted German industrialists, Jewish merchants, and Polish workers who built massive red-brick factory complexes that still define its architecture today. But the boom came with brutal working conditions: 12-16 hour days that sparked major labor unrest. And the industry ultimately couldn’t survive the 20th century's upheavals, collapsing in the 1990s when Polish textiles couldn’t compete with cheaper Asian production.
Left with vast abandoned factories, Łódź has spent recent decades reinventing itself through adaptive reuse, transforming industrial monuments like the Manufaktura complex into shopping centers, cultural hubs, and creative spaces. The city that once clothed millions now embraces film, arts, and technology as its new identity, proving that industrial heritage can become a foundation for renewal rather than a relic of decline.
Are concerns about AI justified?
Artificial intelligence can be viewed in a similar way today. AI tools are becoming increasingly competitive with many tasks previously performed by humans. Naturally, the quality of AI output is still uneven, but the pace of improvement is rapid – gaining ground month by month. More and more complex tasks can now be carried out by AI with minimal human involvement. It is precisely this prospect that has driven investors to recent sell-offs in IT stocks.
But how justified are these concerns? It is difficult to say definitively. Financial markets have a natural tendency to overreact, yet warning signs should not be ignored.
The scale of uncertainty is well illustrated by the divergent estimates of AI’s impact on productivity offered by Nobel laureates in economics. Daron Acemoglu, one of the 2024 recipients, estimated that the effect of AI growth on productivity – specifically total factor productivity (TFP) – would amount to just 0.07 percentage points per year over the next decade. By contrast, Phillipe Agion, a 2025 laureate, projected the impact at 0.68 percentage points per year – ten times higher.
What are the implications for Poland?
Poland is particularly exposed to the artificial intelligence revolution due to the economy’s heavy reliance on the IT sector. According to World Bank data, in 2024 Poland ranked 15th globally in IT and business services exports, while ranking only 21st by GDP. This means that the export of these services is disproportionately large relative to the size of the economy.
Interactive chart Nominal figures show continued growth. In Q3 2025, business services exports reached nearly EUR 8 billion (a four-quarter average), while IT services exports totaled around EUR 4.8 billion.
Interactive chart Measured against GDP, however, the picture is less optimistic. In Q3 2025, business services exports accounted for 3.5% of GDP and have slightly declined in recent quarters. IT services exports remain at 2.1% of GDP and have stagnated for more than a year. Data from Statistics Poland also indicate that employment growth in the information and communication sector has halted.
These are not yet alarming signals, but they show that friction is emerging in these sectors. The slowdown does not necessarily stem solely from AI; the significant real strengthening of the zloty may also play a role.
Over the next few years, however, IT and modern business services remain vulnerable to a decline in demand driven by AI. This process could resemble factory closures caused by offshoring. Some workers may temporarily struggle to find employment in their existing fields. The key difference is the IT sector’s much greater capacity for retraining, which should allow the labor market to adapt more quickly. In the short term, AI will pose a challenge, but over the long term it should not lead to a sustained increase in unemployment.
Key Takeaways
- Implications for Poland. Poland is particularly exposed to these shifts due to the IT sector’s prominent role in the economy. While nominal exports of IT and business services continue to grow, their share of GDP has stagnated, signaling the early stages of adjustment. In the short term, AI poses a challenge; yet given the high skill levels of the workforce, it is unlikely to lead to a sustained rise in unemployment over the long horizon.
- Sector-specific sell-offs. Stock markets are experiencing a sharp, sector-specific sell-off in IT companies and software producers – the so-called “Cloud Crash” – despite stable broader market conditions. Investors fear that the rapid advance of artificial intelligence could curb demand for traditional IT services, a concern reflected in valuations of both global giants and companies listed on the Warsaw Stock Exchange (GPW).
- Globalization as a better analogy than the internet. A more fitting comparison for AI is globalization, understood as a sudden surge in labor supply that lowers costs and displaces existing business models. Just as offshoring delivered long-term benefits while causing short-term shocks, AI may temporarily disrupt labor markets and sectoral structures.