'Illogical': Nvidia's Huang Dismisses Fears That AI Will Replace Software Tools Amid IT Selloff

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 Tuesday. The selloff, partly sparked by AI developer Anthropic's updated chatbot release last week that heightened fears of AI-driven disruption in the data and professional services industry, broadened on Wednesday, hitting software stocks in India, Japan and China.

''There's this notion that the tool in the software industry is in decline, and will be replaced by AI ... It is the most illogical thing in the world, and time will prove itself," Huang said. "If you were a human or robot, artificial, general robotics, would you use tools or reinvent tools? The answer, obviously, is to use tools ... That's why the latest breakthroughs in AI are about tool use, because the tools are designed to be explicit,'' he added.

ALSO READ: Indian IT Stocks Lose Rs 2 Lakh Crore In Value From Anthropic AI Shock

Speaking at an artificial intelligence conference in San Francisco hosted by Cisco Systems, Huang said worries that AI will make software companies less relevant are misguided and AI will continue to rely on existing software rather than rebuild basic tools from scratch.

Indian information technology companies lost nearly Rs 2 lakh crore in market capitalisation in their worst session in several years after Anthropic launched a new enterprise AI automation tool that sparked fears it could eat into the core businesses of data and information services firms. The Nifty IT index comprising of 10 largest companies ended nearly 6% lower, the biggest single day fall in six years.

The US markets also witnessed a $285 billion erosion in major tech IT stocks, a 'flash crash' that signalled the changing dynamics of the tech services space, shifting away from assistive chatbots and human capabilities to autonomous digital workforces.

Global brokerages were quick to issue warnings, with Morgan Stanley citing "Moat Erosion" as Anthropic's ability to structure raw data makes incumbents vulnerable. Jefferies declared that the "Anti-AI Haven", which Indian IT has long been associated with ever since the launch of ChatGPT, has evaporated, forcing investors to liquidate positions in a state of outright panic.

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