A significant discussion is emerging in global markets regarding whether artificial intelligence will undermine traditional software businesses or fortify them as the foundation of the upcoming technological age.
Market expert Ajay Bagga, in a recent statement on X (formerly Twitter), highlighted insights from Jensen Huang, the CEO of Nvidia, who suggested that investors might be misinterpreting the effect of AI on software companies.
Bagga mentions that Huang’s main argument is that “the market got it wrong” about software firms, particularly the concerns that AI will make them obsolete.
AI as a Tool User, Not a Tool Replacer
Huang’s stance is built on three key behavioural and economic aspects.
Firstly, AI agents are “tool users, not tool replacers.” This means AI systems depend on existing software ecosystems, databases, and enterprise platforms to work effectively. Instead of eliminating traditional software, they are layered on top of it.
Secondly, software continues to be the backbone of enterprise operations. From payroll systems and compliance frameworks to customer relationship management and supply chain tools, enterprise software forms the essential infrastructure for modern companies — a foundation that AI cannot easily replace.
Thirdly, Huang believes that the growth of AI is likely to enhance the usefulness of software rather than reduce it. As AI integrates into workflows, the demand for structured data, secure systems, and interoperable platforms may increase, thereby reinforcing the role of established software vendors.
Bagga pointed out that this positions software firms not as threatened by AI, but as key infrastructure benefactors in the AI era.
Parallel Concerns About Employment
Despite Huang’s reassurances against the extinction of software firms, another concern is gaining traction: the effect of AI on white-collar jobs.
The latest developments in artificial intelligence extend far beyond research facilities. They are transforming the very foundations of knowledge work, especially in entry-level positions.
From drafting reports and analysing spreadsheets to coding and managing customer inquiries, tasks that traditionally characterised junior roles are increasingly being performed by AI systems developed by companies like OpenAI, Google, and Microsoft.
What started as a narrative centred around productivity is now being perceived by some experts as a structural change in the organisation of work itself.
Bagga highlighted this disruption in another comment, referring to statements from Dario Amodei, CEO of Anthropic.
“Dario Amodei, widely regarded as the most safety-conscious CEO in the AI sector, has publicly predicted that AI will eliminate 50% of entry-level white-collar jobs within one to five years. Many in the industry believe he is being conservative,” Bagga noted.
He added that the potential for considerable disruption could manifest by the end of this year. “It may take some time to spread throughout the economy, but the foundational capability is being introduced now,” he remarked.
