Just as AI-related concerns have caused a big sell-off in software companies at the stock markets, NVIDIA CEO Jensen Huang seems to have a reassuring message on how AI could impact software.
Speaking with characteristic candor, Huang challenged what he described as a deeply flawed assumption pervading the tech industry: that artificial intelligence will somehow render traditional software companies obsolete. The NVIDIA chief executive employed a thought experiment involving hammers, screwdrivers, and chainsaws to make his point—a down-to-earth analogy from the leader of a company at the forefront of the AI revolution.
“Remember what software is? Software is a tool,” Huang said at the Cisco AI summit. “There’s this notion that the tool in the software industry is in decline and will be replaced by AI. You could tell because there’s a whole bunch of software companies whose stock prices are under a lot of pressure. Because somehow AI is going to replace them. It is the most illogical thing in the world, and time will prove itself.”
Huang then invited his audience to engage in what he called “the ultimate thought experiment”: “Suppose we achieve the ultimate AI, artificial general robotics, the ultimate AI, the physical version of us. You could, of course, solve any problem because you’re humanoid. You could do things if you were a human robot. Would you use a screwdriver or invent a new screwdriver? I would just use one. Would you use a hammer or invent a new hammer? Would you use a chainsaw or invent a new chainsaw? Ideally they don’t use it at all, but do you understand what I’m saying? If you were a humanoid robot, artificial general robotics, would you use tools or reinvent tools? The answer obviously is to use tools.”
The CEO then extended this physical analogy to the digital realm: “And so now do the digital version of that. If you were an artificial general intelligence, would you use the tools like ServiceNow and SAP and Cadence and Synopsys, or would you reinvent a calculator? Of course, you would just use a calculator. That’s the reason why the latest breakthroughs in AI is what? Tool use, because the tools are designed to be explicit.”
Huang’s perspective offers a counternarrative to the prevailing market anxiety that has hammered software and SaaS stocks in recent months. His argument is straightforward: AI systems, even at their most advanced, will require the structured, reliable tools that software companies provide. Rather than replacing software, AI will become a more sophisticated user of it. The emphasis on “tool use” as a breakthrough in AI research supports this view—leading AI models are increasingly being designed to interact with existing software APIs, databases, and enterprise systems rather than attempting to recreate their functionality from scratch. This suggests that companies like ServiceNow, SAP, and specialized software firms may find themselves with a new, highly capable customer in the form of AI agents, rather than facing obsolescence. If Huang’s thesis proves correct, the current market pessimism around software companies may represent a fundamental misunderstanding of how AI will integrate into the business technology landscape.