Selling Software: What the Smart People Say

Nvidia CEO Jensen Huang said software is a tool for AI to use, not replace it.

“The idea is that the tools industry is in decline and will be replaced by AI,” Huang said at a recent Cisco AI event. “You can tell by the fact that there are a lot of software companies whose stock prices are under a lot of pressure to be replaced by AI in some way. This is the most illogical thing in the world, and time will tell.”

Huang cited ServiceNow, SAP, Cadence, and Symbols as bright spots in the industry.

Sridhar Vembu, founder of cloud-based software company Zoho, said SaaS was “ripe for consolidation” long before the rise of AI.

“Industries that spend more money on sales and marketing than on engineering and product development have always been vulnerable,” he wrote for X. “The venture capital bubble and subsequent stock market bubble continued to fund a fundamentally flawed and unsustainable model for far too long. AI is the pin that will pop this balloon.”

Vembu said he is asking employees to consider the possibility that the company may disappear.

“When we accept that possibility, we become more fearless and calmer in charting our course.”

Stephen Sinofsky, who led the development of Windows 7 and 8, said that while AI may change “what we build and who builds it,” talk of the demise of software is just “nonsense.”

“Wall Street is full of all types of investors. There are communities, and they tend to act in packs. I’m sure over the past few weeks, the pack has somehow come to the conclusion that software is dead. The idea of ​​pure play in software just disappears into some kind of language model,” Sinofsky wrote in a lengthy post about X. “Nonsense”.

Sinofsky said it’s true that some companies fail. He also pointed out that this cycle is also occurring in retail and media.

“Tighten your straps,” he wrote. “This is the most exciting time ever for business and technology.”

Arm CEO Rene Haas isn’t panicking.

“If you look at the adoption of enterprise AI, it’s still a long way off,” Haas told the Financial Times.

Haas, who heads SoftBank’s semiconductor company, described the current market reaction as “microhysteria.”

JPMorgan analyst Stephen Parker said investors don’t need to worry too much about the stock’s decline.

“There’s a rotation happening,” Parker told CNBC. “This is about an expanding recovery story. Cyclicals are coming back from the doldrums, and it’s not just AI infrastructure and hyperscalers that are driving the market higher.”

Parker, co-head of global investment strategy at JPMorgan Private Bank, said AI developments are likely to continue to disrupt the software industry.