Why Docusign Stock Fell 11.7% Today

Key Points

• Docusign shares fell 11.7% in intraday trading amid attention on OpenAI’s new artificial intelligence (AI) agent, called DocuGPT.

• OpenAI says the system cuts contract management work and improves data quality.

• The competitive headlines may be overstating the near-term threat to Docusign.

• 10 stocks we like better than Docusign ›

Digital contract management expert Docusign (NASDAQ: DOCU) isn't having a good day today. The stock was down 11.7% at 3 p.m. ET, weighed down by the arrival of new competition. OpenAI's DocuGPT is bringing the heat.

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DocuGPT: OpenAI's agent for wrangling contract data

Artificial intelligence (AI) titan and ChatGPT developer OpenAI is running a series of online presentations this week, highlighting how the company uses agentic AI to run its own business. One example is DocuGPT, an AI agent from OpenAI designed to review large volumes of contract data.

The agent runs a multistep process with collaboration between automated AI functions and reviews by human experts. OpenAI claims that this system cuts the company's contract management work in half, and also produces a cleaner database of organized, searchable contract terms.

Starting from this contract-oriented approach, OpenAI sees DocuGPT as a generally useful tool for creating searchable data storage from other types of financial data.

"The contract data Agent is a blueprint for how AI can responsibly transform regulated, high-stakes work," OpenAI stated. "It shows what becomes possible when experts partner with intelligent systems: more leverage, more confidence, and more time spent on what matters most."

Can OpenAI's DocuGPT challenge Docusign quickly?

OpenAI's new tool seems to butt heads with Docusign's flagship products. The feature set even looks similar to Docusign's recent batch of AI-powered document management platforms. The newcomer may need to catch up with Docusign's secure signature process, but DocuGPT seems like a solid option for overall data management.

That's not the whole story, though. Investors selling Docusign shares on this news should also think about the quality of AI-driven data. Docusign built its AI features with secure data management in mind, while OpenAI found new use cases for ChatGPT-based AI agents.

It may take years to convince Docusign's loyal clients that DocuGPT can be trusted with important papers like property deeds and other legal agreements. Without that trust, I don't expect DocuGPT to steal many clients from Docusign.

That's why I think the market reaction today is a bit overdone. Docusign remains the name to beat in the contract-signing market, and I see a similar story in the financial data space.

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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Docusign. The Motley Fool has a disclosure policy.