As global software and IT stocks fell sharply amid renewed fears that AI could disrupt traditional software companies, Nvidia CEO Jensen Huang pushed back against the narrative. Responding to market anxiety triggered by new AI workplace tools from Anthropic, Huang said the idea that AI would make software companies irrelevant is illogical. His comments came as investor concerns led to sharp sell-offs across the US, Asia, and India’s IT sector.
Nvidia CEO Jensen Huang dismissed fears that artificial intelligence will replace software and related tools, calling the idea ‘illogical,’ after a significant selloff in global software stocks on February 3 https://t.co/BM6Jkam5h0
— Reuters (@Reuters) February 4, 2026
Speaking at an AI conference hosted by Cisco in San Francisco, Nvidia CEO Jensen Huang rejected the idea that AI will replace software companies and the tools they create. He called the narrative “illogical,” arguing that intelligence—whether human, robotic, or artificial—relies on using existing tools rather than reinventing them. According to Huang, the fastest and most effective way to get work done is through well-designed software tools.
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Huang explained that modern AI systems are deeply dependent on software infrastructure such as operating systems, programming frameworks, databases, developer platforms, and enterprise applications. Without these layers, even the most advanced AI models would struggle to function in real-world settings. He noted that recent AI breakthroughs focus on “tool use,” reinforcing the idea that AI consumes software instead of replacing it.
Jensen Huang: Market is wrong about software stocks
“The notion that AI is somehow going to replace software companies is the most illogical thing in the world and time will prove itself” pic.twitter.com/DWhaGC8pYP
— Puru Saxena (@saxena_puru) February 4, 2026
His comments followed a brutal sell-off in global software and IT stocks. In India, major IT firms including Infosys, TCS, HCL Tech, Wipro, and LTIMindtree lost nearly Rs 1.9 lakh crore in market value in a single day, with some stocks falling over 7 per cent. The downturn extended globally, hitting software stocks across Japan, China, Hong Kong, and the US, where the Nasdaq shed nearly $300 billion in value. Even AI leaders like Nvidia and Microsoft closed lower.
The sell-off was triggered by Anthropic’s launch of new AI tools aimed at corporate legal teams, capable of handling tasks like contract review and compliance management. While the announcement raised fears about job displacement, pricing pressure, and shrinking software demand, Anthropic clarified that its tools are meant to work within existing systems and require human oversight. This aligns with Huang’s broader message: AI may reshape workflows, but it still depends on strong software foundations rather than replacing them outright.
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