Nvidia CEO Jensen Huang says AI will not kill software companies, says this is illogical

As global software stocks slid sharply this week, a familiar fear returned to the centre of the tech conversation that whether AI would make traditional software companies irrelevant? Nvidia CEO Jensen Huang doesn’t think so. In fact, he believes the idea makes no sense. Huang’s comments came just as markets reacted to fresh anxiety around AI-driven automation, triggered by new workplace tools unveiled by AI startup Anthropic. The announcement spooked investors, sending software and IT services stocks tumbling across the US and Asia, including a steep fall in India’s IT sector.

Speaking at an AI conference hosted by Cisco in San Francisco, Huang pushed back against the narrative that AI is here to replace software companies and the tools they build.

“There’s this notion that the tool in the software industry is in decline, and will be replaced by AI,” Huang said. “It is the most illogical thing in the world, and time will prove itself.”

Why Jensen Huang says AI can’t exist without software

Huang’s argument rests on a simple idea that intelligence depends on tools. Whether it is a human, a robot or an advanced AI system, the fastest way to get work done is by using existing tools, not rebuilding 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 would struggle to operate in real-world environments.

“If you were a human or 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 about tool use, because the tools are designed to be explicit.”

In short, he suggested that AI is not replacing software and it is just consuming it.

A brutal day for software and IT stocks

Huang’s remarks came after a sharp sell-off across global software stocks. In India, IT majors such as Infosys, TCS, HCL Tech, Wipro and LTIMindtree saw heavy losses, wiping out nearly Rs 1.9 lakh crore in market value in a single day. Infosys and Mphasis dropped more than 7 per cent, while TCS and HCL Tech also closed sharply lower.

The pain was not limited to India. Software stocks fell in Japan, China and Hong Kong, while the tech-heavy Nasdaq slid more than 1 per cent overnight, erasing close to $300 billion in market value. Even AI leaders such as Nvidia and Microsoft ended the day lower.

What spooked investors

The trigger for the sell-off was Anthropic’s latest product update. The company introduced new tools aimed at corporate legal teams, capable of reviewing contracts, managing compliance processes, drafting legal briefs and generating standardised responses.

For investors, the announcement raised uncomfortable questions. If AI can handle tasks once performed by lawyers, analysts and support staff, what happens to the software and IT services built around those roles?

Concerns have grown around pricing pressure, shrinking margins and the possibility that companies may need fewer software licences as AI boosts productivity. Some analysts have warned that these trends could limit how much software companies can charge in the future.

Anthropic defends its new AI tool

Anthropic has tried to ease some of the concern, stressing that its legal-focused tool is not meant to offer legal advice and that AI-generated outputs must 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 lines up with Huang’s view. AI may change how work gets done, but it still depends on strong software foundations to deliver results. In a week dominated by falling stock prices and loud predictions, Huang’s message is a reminder that new technology often builds on old tools — not bulldozes them.