This week, markets saw a decline as AI company Anthropic rolled out new additions to Claude that can carry out a range of tasks typically done by software providers.

Shares of software-as-a-service firms such as Adobe, Intuit, and Salesforce dropped sharply due to concerns that AI tools could eat into their business. (Marc Benioff, co-chair and owner of TIME, is the CEO and founder of Salesforce.) Established tech giants with significant AI operations like Microsoft, Amazon, and Google were also hit hard. A trillion dollars in market value was lost within a week before recovering some value on Friday.

Analysts are still analyzing what all this means given the various factors at play. Anthropic leading in the race to develop the best AI models may not be good news for legacy competitors building their own models, but it’s also not an existential threat. Anthropic partners with Amazon and Google to provide the data center capacity needed to bring its product to market. In any case, analysts see the news as a clear sign that AI is here to stay.

What does all this mean for energy and climate? Last week, I wrote about how the capital investment in AI has the potential to unlock new energy technologies—and fundamentally reshape our view on bringing clean energy to the market. In my opinion, this week’s news only highlights that dynamic.

Most obviously, markets are showing that confidence in AI is more than just hype and that the trillions in investment aren’t likely to be a bubble. Consequently, that means the market may be able to sustain the growing investment in electricity. Indeed, utility company stocks rose this week despite the broader market downturn.

It’s also a crucial time for the hyperscalers—large tech companies that offer cloud services—that have poured billions into the future of AI. Much of the coverage of their AI efforts focuses on the push to build the best models. That’s important, of course, but this market reaction reveals a more complex reality: besides racing to improve their models, legacy tech companies have also become AI infrastructure providers—offering chips, land, and power to build data centers to serve not only their own needs but also those of their customers. Anthropic is one such customer, and it’s reasonable to assume it will be a growing one.

As AI becomes more deeply established, the need for this infrastructure will only expand. To understand the dynamic, it’s helpful to pay attention to how hyperscalers talk about power. Last week, during an event, Microsoft CEO Satya Nadella referred to “tokens per watt per dollar” as a key performance metric. Including electricity along with cost as a key performance metric indicates that the focus on power is here to stay.

This has direct implications for decarbonization. In the short to medium term, it means more power consumption, including fossil fuels. In the long term, it means more investment in a variety of low-carbon energy technologies—from advanced nuclear to geothermal power. This week’s market upheaval may have been about software, but it will have important implications for the future of physical infrastructure and power.

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