Submission + - "The markets 'got it wrong' on AI threat to software companies" says Nvidia CEO (cnbc.com)
joshuark writes: Jensen Huang CEO of NVidia states that the markets "got it wrong" about AI.
“I think the markets got it wrong,” Huang said, pushing back on fears that AI agents will cannibalize the enterprise software industry. He expects a broad swath of software firms to use agentic AI to develop their software and boost efficiency.
Huang calls this “counterintuitive,” that software tools will utilize AI. “That’s the reason why we also say agents are tool users,” he added. He gave the internet browser and Microsoft’s Excel as examples of tools that AI agents will use.
"All of these tools that we use today, whether it’s Cadence or Synopsis or ServiceNow or SAP, these tools exist for a fundamentally good reason. These agentic AI will be intelligent software that uses these tools on our behalf and help us be more productive,” Huang added.
The comments came after Nvidia reported that its revenue for the fiscal fourth quarter climbed 73% to $68.13 billion from a year earlier, beating analysts’ estimates for $66.21 billion.
Investors had grown weary that the massive run-up in spending on AI hardware might not be sustainable, stoking fears of a bubble building in the sector. NVidia issued an upbeat guidance with revenue for the fiscal first quarter to be $78 billion, plus or minus 2%, well above analysts’ forecast for $72.6 billion.
Dan Niles, founder and portfolio manager of Niles Investment Management, told CNBC after Huang’s interview that, "People need to remember that all everything — whether it’s the railroads, canals, the internet, all of these things tend to get overbuilt — and then we figure out who the winners and losers are going to be.”
Niles explained, “There’s some real companies that are going to go to zero in the software space.” He added that the most resilient players will be in the database and cybersecurity sectors.
Nvidia shares rose as much as 2% in extended trading.
“I think the markets got it wrong,” Huang said, pushing back on fears that AI agents will cannibalize the enterprise software industry. He expects a broad swath of software firms to use agentic AI to develop their software and boost efficiency.
Huang calls this “counterintuitive,” that software tools will utilize AI. “That’s the reason why we also say agents are tool users,” he added. He gave the internet browser and Microsoft’s Excel as examples of tools that AI agents will use.
"All of these tools that we use today, whether it’s Cadence or Synopsis or ServiceNow or SAP, these tools exist for a fundamentally good reason. These agentic AI will be intelligent software that uses these tools on our behalf and help us be more productive,” Huang added.
The comments came after Nvidia reported that its revenue for the fiscal fourth quarter climbed 73% to $68.13 billion from a year earlier, beating analysts’ estimates for $66.21 billion.
Investors had grown weary that the massive run-up in spending on AI hardware might not be sustainable, stoking fears of a bubble building in the sector. NVidia issued an upbeat guidance with revenue for the fiscal first quarter to be $78 billion, plus or minus 2%, well above analysts’ forecast for $72.6 billion.
Dan Niles, founder and portfolio manager of Niles Investment Management, told CNBC after Huang’s interview that, "People need to remember that all everything — whether it’s the railroads, canals, the internet, all of these things tend to get overbuilt — and then we figure out who the winners and losers are going to be.”
Niles explained, “There’s some real companies that are going to go to zero in the software space.” He added that the most resilient players will be in the database and cybersecurity sectors.
Nvidia shares rose as much as 2% in extended trading.
"The markets 'got it wrong' on AI threat to software companies" says Nvidia CEO More Login
"The markets 'got it wrong' on AI threat to software companies" says Nvidia CEO
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