On a recent Tuesday, the US stock market experienced considerable upheaval attributed to Altruist AI's launch of its new platform, Hazel. This follows a previous market downturn caused by Anthropic AI the week prior, where significant declines in shares of major IT companies such as Meta, Microsoft, and Amazon were noted. Altruist, a fintech startup, announced that their AI tool Hazel is designed specifically for tax planning and financial advisory, raising concerns among investors about its potential impact on traditional financial firms.

The Hazel platform incorporates advanced features that utilize AI to streamline tax planning processes by analyzing various financial documents including tax returns and payroll information. These capabilities are designed to enable financial advisors and wealth management firms to offer strategies that mimic the insights of experienced finance experts, potentially altering the competitive landscape in the finance sector. As a key player in providing technology platforms for investment advisors, Altruist's claims have drawn significant attention and skepticism from investors and market analysts.

The reaction within the financial sector has been immediate, with shares of competing financial companies witnessing sharp declines. The apprehension surrounding how AI could disrupt traditional financial advisory services has caused a ripple effect in stock performance, underscoring the growing significance of AI technologies in shaping market dynamics. Observers are keenly watching how this will influence investor confidence and the broader implications for the fintech industry as a whole.