Far be it from me to offer up a differing perspective from the almighty AI chip god, more formally known as Nvidia (NVDA) founder and CEO Jensen Huang.
But this one time, as it pertains to the AI stock rout we are witnessing, I must push back on the often-leather-jacket-clad Big J.
“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 reportedly said at an AI event that router giant Cisco (CSCO) held on Tuesday. “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.”
At this crucial moment for tech investors, the market couldn’t care less what Jensen has to say on this topic. Sure, Jensen is often the one who stirs the drink in markets, in part because Nvidia is the one that stirs the drink in markets.
But the market fully believes software companies such as Salesforce (CRM), Workday (WDAY), Thomson Reuters (TRI), SAP (SAP), and ServiceNow (NOW) have their terminal values at risk because of quickly developing advancements in AI.
Just look at what Anthropic (ANTH.PVT) debuted on Friday, which initially flew a little under the radar before sparking another software rout on top of the rout we had already seen in 2026.
The AI developer debuted plug-ins for its Claude Cowork agent that could automate tasks across legal, sales, marketing, and data analysis.
By the close of trading on Tuesday, shares of Thomson Reuters, LegalZoom.com (LZ), PayPal (PYPL), Expedia Group (EXPE), Equifax (EFX), and Intuit (INTU) had all crashed by double-digit percentages. There is minimal nibbling at these names today on the deep pullback.
The overall US software index fell nearly 5% and saw 104 decliners and only nine risers. The drop marked its sixth successive decline, putting the index back to April levels.
“While the question over the end-winners from AI is unlikely to be answered in 2026, recent months have seen a clear shift in markets from AI euphoria towards more differentiation between companies, and growing concern about its disruption to existing business models,” Deutsche Bank strategist Jim Reid wrote in a note.
What, you think other model builders aren’t working on functionality similar to Anthropic’s? You think Anthropic and the brother-sister leadership combo of Dario and Daniela Amodei won’t lean into more of these AI tools to try rendering software companies obsolete? Their only goal is to drive value higher for Anthropic investors! They couldn’t care less about the feelings of Marc Benioff at Salesforce (who has seen his stock plunge 42% in the past year because of these AI fears).