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Mike Cannon-Brookes has suffered an almost $1billion loss as competitors develop new and superior artificial intelligence tools to rival his software company.
Atlassian's shares plummeted eight per cent on the NASDAQ, one of the United States' three most-followed stock markets, on Wednesday morning (AEDT).
The company shares hit US$68.17 (AU$97.43), more than a third of the stock's peak of US$242 (AU$345.88) within the last 52 weeks.
It came as tech competitors Amazon and San Francisco-based Anthropic revealed updates on their AI products.
Anthropic, known for its AI assistant Claude, revealed on Tuesday that the software can be used on computers to complete tasks such as opening apps, navigating browsers and filling spreadsheets.
Meanwhile, Amazon Web Services revealed it has been building AI technology to automate sales and business development departments.
The software could rival Atlassian's suite of AI features, which includes Jira - a project management tool for teams.
As a result of the NASDAQ fall, the company faced an almost $1billion blow, The Australian reported. Daily Mail contacted Atlassian for comment.
Embattled technology billionaire Mike Cannon-Brookes (pictured) and his software company Atlassian have faced a costly hit after competitors revealed new artificial intelligence tools
Atlassian's shares plummeted 8 per cent on the NASDAQ, one of the United States' three most-followed stock markets, on Wednesday morning (AEDT)
Atlassian made headlines recently when it sacked 1,600 staff by email. Cannon-Brookes gave a sombre video address explaining his decision.
'Days like these are among the toughest that we have as a company, and certainly the toughest that I have as a leader,' he said.
'I am deeply sorry for the disruption this creates in your life.
'Even at a moment like this, and especially at a moment like this, your impact and contributions matter enormously.
'I want to say thank you for all of those contributions. Your work will live on in our products, in the experiences of our customers, and in the culture you’ve helped us build.'
Andre Serna, who was Atlassian's vice president of engineering in the global experiences department, was laid off after 13 years at the company.
As he and other axed staff scrambled to re-enter the job market, he published a plan to help them all find new roles: a list of people available to work for prospective new employers.
'After 13 years my own journey at Atlassian has skidded to a halt. I have taken the decision to leave the company – admittedly accelerated by having been laid off,' he wrote on LinkedIn.
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The company announced earlier in March that it was laying off 1,600 employees including Andre Serna (pictured), who has mobilised to help axed colleagues find their next role
'There will be time to reflect on this, but more urgently, I am putting together a spreadsheet of people impacted by the current round of layoffs in the hope that I can pass this on to any prospective employers.
'You are all awesome and companies should be tripping over themselves to hire you.'
Atlassian's stock has dropped more than 50 per cent since the start of 2026 as investors fear AI could shrink workforces and demand for corporate software.
The company soared to a US$162billion valuation in 2021 during the Covid-19 work-from-home tech boom, but its market cap has since slumped to about US$19.90billion.
Atlassian earns much of its revenue by charging companies per user.
If businesses can use AI to do the work of 10 employees with just two staff, they may only need two licences instead of 10, potentially slashing revenue from that customer by up to 80 per cent.
Newer AI agents can also complete multi-step tasks such as researching a problem, writing code to solve it, testing the result, and refining it without constant human input.
Investors fear that if AI allows large companies to operate with smaller teams, demand for many workplace software products such as those offered by Atlassian could slow across the tech sector, dragging down company valuations.
As his company faces growing market pressure, Cannon-Brookes is also navigating a complex divorce from his ex-wife Annie (both pictured in 2016) after they split in July 2023
As his company faces growing market pressure, Cannon-Brookes is also navigating a complex divorce from his ex-wife Annie after they split in July 2023.
Beyond Atlassian shares, the couple's reported asset pool totals about $10billion, including a property portfolio valued at roughly $360million.
His holdings also include high-profile sporting investments. Cannon-Brookes became the youngest current owner of a US NBA franchise in 2020 after spending hundreds of millions to become co-owner of the Utah Jazz.
In 2021, he also acquired a 25 per cent stake in NRL club the South Sydney Rabbitohs.
Neither Cannon-Brookes nor his wife have publicly commented on the breakdown of their relationship or how their shared investments will ultimately be divided.
Despite the market and marriage turmoil, Cannon-Brookes insisted Atlassian was building a 'f****** great business' during a quarterly earnings investor meeting earlier this year.
But in the month leading up to the results, he continued selling roughly 7,665 shares a day, at prices ranging from US$161.11 per share on January 8 to US$105.14 by February 4.
'I'm convinced AI is great for Atlassian. Others think software is dead,' Cannon-Brookes told shareholders.
'In this environment it seems that noise swamps signal, nuance gets lost. AI is the most important technology of our generation.
'And you've heard me say AI is the best thing to happen to Atlassian. At the same time you've probably heard a lot of people say SaaS (software-as-a-service) is over, and software is dead.
'Well I want to take the opportunity to share a few thoughts about why AI is great for Atlassian… For most people AI becomes most valuable when it shows up inside the workflows, business processes and applications that they run their business on, or choose to run their business on, and that's exactly what we're doing today.'