Jensen Huang: AI will not wipe out software companies; agents will cause tool usage to grow exponentially

ME News update: On April 16 (UTC+8), according to Beating Monitoring, Jensen Huang refuted the popular narrative in an interview that “AI will cause software company valuations to collapse,” and offered the opposite view: AI agents will significantly increase the usage of traditional software tools—demand will multiply rather than be substituted for software companies.

“What I see is exactly the opposite of what most people see. The number of agents will grow exponentially, and the number of tool users will also grow exponentially.” He gave examples: Synopsys’s chip design compiler, Cadence’s layout tools, and design rule checkers—instances of these tools will sharply increase with the number of agents.

“Today, we’re limited by the number of engineers. Tomorrow, these engineers will be supported by a batch of agents. We will explore the design space in ways never before possible, using the tools we use today.” He acknowledged that agents are not yet proficient at using tools, which is why the market hasn’t yet reflected this logic: “Either software companies build their own agents, or agents become smart enough to use these tools. I think both will happen.”

This assessment comes as many enterprise software companies in recent times—especially those in engineering tools such as EDA and CAD—have seen valuation cuts due to market expectations that AI will replace engineering work. Huang provided a different framework: AI is not the end of SaaS, but a multiplier of SaaS demand. The difference is that most market analysis focuses on the portion of output where AI replaces human engineers, while Huang focuses on the fact that agents themselves also need to call on tools to do their work.

(Source: BlockBeats)