Market panic over AI? Nvidia CEO Jensen Huang says investors got it all wrong

President and CEO of NVIDIA Jensen Huang has dismissed speculation that artificial intelligence tools will replace traditional software companies, arguing that investors have overreacted to recent developments around AI agents such as Claude Cowork.

Speaking to CNBC, Huang said, “I think the markets got it wrong,” in response to concerns that AI could displace legacy enterprise software providers.

AI will use tools, not replace them

The debate intensified after Claude Cowork, developed by Anthropic, unsettled the stock prices of several SaaS firms, including TCS and Infosys. Investors feared that AI agents capable of executing tasks autonomously could reduce the need for conventional enterprise software.

Huang, however, outlined a different vision. According to him, AI agents will act as tool users rather than replacements. “That’s the reason why we also say agents are tool users,” he said.

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He argued that established enterprise platforms such as SAP and ServiceNow “exist for a fundamentally good reason” and will continue to play a central role in business operations. In his view, AI systems will become intelligent layers that operate these tools on behalf of humans, improving productivity rather than eliminating software infrastructure.

Huang added that AI will rely on existing systems to complete tasks and return information in formats that humans can interpret and use effectively.

Earlier this month, he described the idea that AI would completely replace the software industry as “the most illogical thing in the world”.

Nvidia posts strong revenue growth

Huang’s comments come as Nvidia reported a 73 per cent year-on-year increase in fourth-quarter revenue for FY25, reaching $68.13 billion. The company’s annual revenue rose to $215.9 billion.

Nvidia, which produces GPUs widely used in AI data centres, has forecast revenue of $78 billion for the first quarter of FY26. With a market capitalisation of $4.8 trillion, it is currently the world’s most valuable publicly traded company.

Huang said customers are accelerating investment in AI computing infrastructure, describing it as the foundation of the “AI industrial revolution” and a driver of future growth.

The episode highlights growing market sensitivity to AI developments, even as industry leaders argue that the technology is more likely to reshape workflows than dismantle the existing software ecosystem.