Nvidia CEO Jensen Huang said on Wednesday that markets have miscalculated the AI threat to software companies, hours after the chip behemoth issued an upbeat sales forecast on strong AI demand.

“I think the markets got it wrong,” Huang told CNBC, pushing back on fears that AI agents will cannibalise the enterprise software industry.

Instead, he expects a broad swath of software firms to use agentic AI to develop their software and boost efficiency.

In what he described as “counterintuitive”, Huang said that AI agents won’t replace these software tools, but will use them instead.

“That’s the reason why we also say agents are tool users,” he added.

He cited 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 Synopsys or ServiceNow or SAP, these tools exist for a fundamentally good reason. These agentic AIs will be intelligent software that uses these tools on our behalf and help us be more productive,” Huang added.

“Nobody’s going to service better than ServiceNow, and they’re going to come up with agents that are really fine-tuned and optimised for the work that uses the tools that they have.”

“In the end, we need the tools to finish their work and put the information back in a way that we can understand,” he said.

The comments came after Nvidia reported that its revenue for the fiscal fourth quarter climbed 73 per cent to $68.13 billion from a year earlier, beating analysts’ estimates for $66.21 billion.

The company also issued an upbeat guidance with revenue for the fiscal first quarter to be $78 billion, plus or minus 2 per cent, well above analysts’ forecast for $72.6 billion.

With inputs from Reuters