Software Sale: What Smart People Say

Nvidia CEO Jensen Huang said software is a tool that AI can use rather than replace.

“There’s this idea that the tool industry is in decline and will be replaced by AI,” Huang said at a recent Cisco AI event. “You could see it because there are a whole bunch of software companies whose stock prices are under a lot of pressure because AI is going to replace them one way or another. It’s the most illogical thing in the world and time will prove itself.”

Huang mentioned ServiceNow, SAP, Cadence and Synopsis as bright spots in the industry.

OpenAI CEO Sam Altman said volatility in the software market will continue.

“It’s different, it’s definitely not dead,” Altman said during an interview on TBPN. “How you create it, how you’re going to use it, how much you’re going to have written for you every time you need it, versus how much you want some kind of consistent UX — yeah, that’s all going to change.”

In the meantime, the sell-offs that Wall Street has now continued are likely to continue.

“I think it’s going to be volatile for a while as people figure out what this looks like.”

Dylan Field, CEO of Figma, said it’s not just about building something quickly, but about “building it right.”

“Good enough, it works, it’s not enough,” he told CNBC in February. “You really have to concentrate.”

Overall, Field said volatility is good for business. Figma shares have fallen more than 79% in the past year, illustrating the growing pains for the design company since its much-hyped IPO in July 2025.

“I think when you look back on this time, we will be a more resilient company overall,” Field said.

Figma also announced a collaboration with Anthropic on a tool that turns AI-generated code into editable designs.

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

“An industry that spends far more on sales and marketing than on engineering and product development was always vulnerable,” he wrote of AI is the pin that pops this inflated balloon.”

Vembu said he is asking his employees to consider the possibility of a demise of the company.

“If we accept that possibility, we become more fearless and can calmly chart our course.”

Steven Sinofsky, who helped develop Windows 7 and 8, said that AI may change “what we built and who builds it,” but that stories about software’s demise are just “nonsense.”

“Wall Street is filled with investors of all kinds. There is also a community, and they tend to work in herds. Over the past few weeks, the herd has finally come to the conclusion that software is somehow dead. That the idea of ​​a pure software game will simply disappear into some language model,” Sinofsky wrote in a lengthy post on X. “Nonsense.”

Sinofsky said it’s true that some companies will fail. He also noted that such cycles have occurred in retail and media.

“Brace yourself,” he wrote. “This is the most exciting time for business and technology ever.”

Arm CEO Rene Haas does not panic.

“When I look at the deployment of AI in companies, we are nowhere near where this could be,” Haas told the Financial Times.

Haas, who heads SoftBank’s semiconductor business, said the current market reaction is “microhysteria.”

JPMorgan analyst Stephen Parker said investors shouldn’t worry too much about the selloff.

“We are seeing a rotation,” Parker told CNBC. “It’s about broadening the recovery story. Cyclical stocks are getting the slack, and it’s not just the AI ​​infrastructure and hyperscalers that are driving the markets higher.”

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

Anish Acharya, general partner at A16z, said the sell-off was an overreaction based on a misunderstanding of how AI will be deployed.

“You have an innovation bazooka with these models,” Acharya told podcaster Harry Stebbings during an episode of “20VC.” “Why focus it on rebuilding payroll, ERP or CRM, right? You’re going to use it to expand your core benefit as a business, or you’re going to use it to optimize the other 90% you’re not spending on software today.”

Acharya said there will be “secular losers,” but overall the sell-off was misleading.

“I think the common narrative that we’re going to code everything is completely wrong and that the entire market is oversold software,” he said.

Amplitude CEO Spenser Skates said the sell-off rightly showed that many SaaS companies are moving too slowly.

“The average SaaS company’s innovation has essentially come to a standstill,” Skates told TBPN in February. “I don’t know if you guys have ever been into this, but it’s crazy how little they ship in terms of net new products.”

Skates said AI has put a big emphasis on the speed of innovation.

“It’s like sushi,” he said. “Buyers always want the best. So if you keep innovating the best, you can charge a premium. It’s great that the 7-Eleven at the gas station now sells sushi. It won’t put Jiro out of business in Japan.”

AWS CEO Matt Garman said current fears are “exaggerated.”

“AI is absolutely a disruptive force that will change the way software is consumed and how it is built,” he told CNBC in February.

Amazon’s CEO said today’s SaaS companies can still survive this moment.

“They have to innovate, just like the rest of the world,” he said. “They can’t stand still. If they stand still, they will be absolutely disrupted.”