Nvidia CEO Jensen Huang: AI Will Not Replace Software Companies

Nvidia CEO Jensen Huang has rejected fears that AI will replace software companies, calling the idea “illogical.” His comments came after Anthropic’s new AI tools spooked investors, triggering a global sell-off in IT and software stocks. Huang emphasized that AI systems rely on existing software frameworks and tools, meaning AI consumes software rather than replaces it. Anthropic also defended its tools, stressing they are designed to work within existing systems, not eliminate them.

Feb 5, 2026 0 45

Nvidia CEO Jensen Huang: AI Will Not Replace Software Companies

As global software stocks faced steep declines this week, fears resurfaced about whether AI could make traditional software firms obsolete. Nvidia CEO Jensen Huang dismissed the idea, calling it “illogical.” His remarks came amid investor anxiety triggered by new workplace automation tools launched by Anthropic, which sent IT and software stocks tumbling across the US, Asia, and India.

Why Huang Believes AI Relies on Software

Huang argued that intelligence depends on tools. Whether human, robotic, or AI-driven, the fastest way to accomplish tasks is by using existing tools rather than reinventing them.

Modern AI systems depend on operating systems, programming frameworks, databases, developer platforms, and enterprise software to function. Without these layers, even advanced AI models would struggle in real-world environments.

“AI breakthroughs are about tool use,” Huang explained. “The notion that software will be replaced is the most illogical thing in the world.”

Market Turmoil in Software and IT Stocks

Huang’s comments followed a brutal sell-off in global software markets:

In India, IT majors like Infosys, TCS, HCL Tech, Wipro, and LTIMindtree lost nearly ₹1.9 lakh crore in market value in a single day.
Infosys and Mphasis dropped over 7%, while TCS and HCL Tech also closed sharply lower.
Losses extended to Japan, China, and Hong Kong, while the Nasdaq fell more than 1%, erasing $300 billion in value. Even Nvidia and Microsoft ended lower.

What Triggered Investor Panic

The sell-off was sparked by Anthropic’s new AI tools for corporate legal teams, capable of reviewing contracts, managing compliance, drafting briefs, and generating responses. Investors worried that such automation could reduce demand for traditional software and IT services, pressuring margins and pricing power.

Anthropic’s Defense

Anthropic clarified that its legal-focused AI is not a substitute for licensed professionals and must be reviewed by experts. It also introduced open-source tools for sales and customer service, designed to integrate with existing systems rather than replace them.

This aligns with Huang’s view: AI may transform workflows, but it still depends on strong software foundations to deliver results.