As global software stocks reel from fears that artificial intelligence could make traditional software obsolete, Jensen Huang is pushing back hard.
Speaking at a Cisco-hosted AI summit, the Nvidia chief executive dismissed the idea that AI will replace software companies, calling it “the most illogical thing in the world” and arguing that markets are misunderstanding how AI actually works.
“AI uses tools. It doesn’t replace them”
Huang compared AI to a highly capable human or even a humanoid robot. Even with extreme intelligence, he said, the smartest approach is still to use existing tools rather than reinvent them.
“If you were a humanoid robot, would you invent a new screwdriver or just use one?” Huang asked. “The obvious answer is to use tools.”
He extended that logic to software, saying advanced AI systems would rely on enterprise tools like ServiceNow, SAP, Cadence and Synopsys rather than rebuilding their functions from scratch.
“The latest breakthroughs in AI are about tool use,” Huang said. “That’s because tools are designed to be explicit and reliable.”
Comments come after brutal software sell-off
Huang’s remarks followed a sharp global sell-off in software and IT stocks, sparked by fears that new AI workplace tools could destroy demand for traditional software.
The anxiety intensified after Anthropic launched new AI products for legal teams, triggering steep declines across legal software, enterprise platforms and IT services firms worldwide. Software stocks in the US, Europe and Asia fell sharply, with investors rushing to exit positions amid what some traders dubbed a “SaaSpocalypse.”
Even major tech names were hit, with Nvidia and Microsoft both closing lower during the sell-off.
AI depends on software infrastructure
Huang argued that the fears ignore a basic reality. Modern AI depends on layers of software infrastructure, including operating systems, developer frameworks, databases, enterprise platforms and cloud tools.
Without those systems, he said, even the most advanced AI models would struggle to function in real-world business environments.
Rather than replacing software companies, Huang suggested AI could become their most powerful user, embedding itself into existing platforms and driving new demand.
Market may be mispricing the future
The Nvidia CEO’s comments offer a direct counter to the narrative driving recent market moves. While investors worry about pricing pressure, job displacement and shrinking software moats, Huang’s view is that AI reshapes workflows but does not eliminate the need for software.
If that view proves correct, the current panic in software stocks may reflect fear rather than fundamentals.
“The notion that AI will replace software companies is wrong,” Huang said. “Time will prove it.”
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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