Nvidia CEO Jensen Huang says AI won’t kill software companies, it’s illogical
As software stocks grapple with fears of AI disruption, Nvidia CEO Jensen Huang says the idea that AI will replace software is “illogical” and misunderstands how modern technology works.
As global software stocks fell sharply this week, a familiar fear returned to the center of the tech conversation: Will AI make traditional software companies irrelevant? Nvidia CEO Jensen Huang doesn’t think so. In fact, he believes that this idea makes no sense. Huang’s comments came as markets reacted to fresh concerns around AI-powered automation sparked by a new workplace tool unveiled by AI startup Anthropic. The announcement spooked investors, leading to a decline in software and IT services stocks across the US and Asia, including a sharp decline in India’s IT sector.
Speaking at an AI conference hosted by Cisco in San Francisco, Huang refuted the narrative that AI is here to replace software companies and the tools they make.
“There is a perception that tools in the software industry are in decline, and will be replaced by AI,” Huang said. “It is the most illogical thing in the world, and time itself will prove it.”
Why does Jensen Huang say that AI cannot exist without software?
Huang’s argument is based on a simple idea that intelligence depends on tools. Whether it’s humans, robots, or advanced AI systems, the fastest way to get the job done is to use existing tools, rather than building everything from scratch.
AI systems today rely on operating systems, programming frameworks, databases, developer platforms, and enterprise software to function. Without these layers, even the most advanced AI models will struggle to function in real-world environments.
“If you were a human or a robot, artificial, general robotics, would you use tools or reinvent tools? The answer, obviously, is to use tools,” Huang said. “That’s why the latest breakthroughs in AI are all about the use of tools, because tools are designed to be obvious.”
In short, he suggested that AI is not replacing software and is just consuming it.
A brutal day for software and IT stocks
Huang’s comments came after a sharp selloff in global software stocks. In India, big IT companies like Infosys, TCS, HCL Tech, Wipro and LTIMindtree suffered huge losses, losing about Rs 1.9 lakh crore in market value in a single day. Infosys and Mphasis fell by more than 7 per cent, while TCS and HCL Tech also closed sharply lower.
This pain was not limited to India only. Software stocks fell in Japan, China and Hong Kong, while the tech-heavy Nasdaq fell more than 1 percent overnight, wiping off about $300 billion in market value. Even AI leaders like Nvidia and Microsoft ended the day with a decline.
What scared investors
The reason for the selloff was Anthropic’s latest product update. The company introduced new tools aimed at corporate legal teams, enabling them to review contracts, manage compliance processes, prepare legal briefs, and prepare standardized responses.
For investors, the announcement raised uncomfortable questions. If AI can take over the tasks performed by lawyers, analysts, and support staff, what will happen to the software and IT services built around those roles?
Concerns have grown over pricing pressures, shrinking margins, and the possibility that companies may need fewer software licenses as AI increases productivity. Some analysts warn that these trends could limit how much software companies can charge in the future.
Anthropic defends its new AI tool
Anthropic has tried to mitigate some concerns, emphasizing that its legal-focused tool is not meant to provide legal advice and that AI-generated outputs should be reviewed by licensed professionals. The company also launched open-source tools for sales and customer service, designed to work within existing systems rather than replace them.
That point matches Huang’s view. AI may change the way work is done, but it still depends on a strong software foundation to deliver results. In a week dominated by falling stock prices and bullish predictions, Huang’s message is a reminder that new technology often builds on old tools — not eliminates them.
