NVIDIA CEO Jensen Huang pushed back sharply against the recent market selloff in software stocks, saying fears that AI will replace the software industry make little sense. Speaking at Cisco’s AI Summit in San Francisco, Huang said software products are tools, and AI will rely on those tools instead of rebuilding everything from scratch.
Huang argues AI needs software tools, not replacements
Huang used a simple comparison to make the point. “Are you going to use a screwdriver, or invent a new screwdriver?” he asked, arguing that the market is misunderstanding the role software plays in an AI stack. In his view, AI systems still depend on existing software ecosystems, enterprise workflows, and established toolsets to get work done.
He also named ServiceNow, SAP, Cadence, and Synopsys as companies that are well positioned. The remarks came as global software names were already under heavy pressure from concerns that AI automation could weaken traditional software business models. Selling accelerated fast.
Anthropic plugin release helped trigger a $285 billion wipeout
The immediate catalyst for the rout was Anthropic’s release on January 30 of 11 open-source plugins for its AI assistant Claude Cowork. One legal-focused plugin can automate contract review, NDA classification, compliance workflows, and legal brief preparation. That raised fresh concerns that AI automation may erode the value behind SaaS subscription models.
According to a Goldman Sachs basket tracking U.S. software stocks, the group fell 6% in a single day, its biggest one-day drop since tariff-related fears last April. A financial services sector index also dropped nearly 7%. Thomson Reuters fell about 17% to 18%, while RELX and Wolters Kluwer lost 14% and 13%. In total, the selloff erased about $285 billion in market value.
NVIDIA says internal AI adoption is freeing up staff time
Huang pointed to NVIDIA’s own experience as support for his argument. He said the company has broadly adopted AI tools, including Cursor, and that the result has not been workforce reduction. Instead, those tools give employees more time to focus on NVIDIA’s core strengths: designing semiconductors and computing systems.
The selloff has also spread into Asia. Indian IT exporter Infosys dropped 7.3%, and software shares are down about 20% so far this year. The report also cited Bridgewater founder Ray Dalio, who previously said it is still too early to sell AI stocks because the “pin” that could burst the bubble has not yet appeared.