U.S. software and data services stocks continued their steep decline on Thursday, marking a seventh consecutive day of losses as investor concerns mounted over the potential for artificial intelligence to disrupt the sector. The prolonged sell-off erased more than $1 trillion in market value over the past week, reflecting growing unease about how rapidly AI advancements could reshape traditional software business models. The downturn has been fueled by fears that AI tools—particularly generative AI—could automate or replace many functions currently performed by software platforms, from coding and data analysis to customer support and enterprise workflows. Companies that rely on recurring revenue from enterprise software licenses and cloud services are especially vulnerable, as AI-driven solutions may offer faster, cheaper, and more adaptable alternatives. Tech giants and mid-sized software firms alike have seen their valuations pressured. Shares of companies like Adobe, Salesforce, and Microsoft have declined sharply, despite their own aggressive investments in AI. Investors are questioning whether these firms can maintain pricing power and customer loyalty in an era where AI can perform complex tasks with minimal human input. The sell-off also highlights a broader shift in market sentiment. After a period of strong gains driven by AI hype, investors are now grappling with the reality that widespread AI adoption could reduce demand for legacy software products. Some analysts warn that the long-term impact on software companies could be profound, with entire product lines becoming obsolete or commoditized. Meanwhile, AI startups and infrastructure providers have seen gains, reinforcing the idea that value is shifting from software-as-a-service (SaaS) providers to companies building the underlying AI technologies. This divergence has further intensified concerns among traditional software investors. The trend underscores a pivotal moment in the tech industry, where innovation is both a promise and a threat. As AI continues to evolve, the ability of software companies to adapt—by integrating AI into their offerings or redefining their value proposition—will be critical to their survival and long-term growth.