Countering the narrative that AI will kill software, NVIDIA CEO Jensen Huang argues agents will be tool users, not tool builders. Just as a robot would pick up a screwdriver instead of reinventing one, AI agents will leverage existing platforms. This positions AI as an accelerator for current software, not an immediate replacement.

Contrary to fears of AI making SaaS obsolete, the reality is that most enterprise software is deeply flawed. A contrarian view is that AI will provide the tools to finally rebuild these systems better, creating a massive new wave of demand for software development and product design.

As large AI models absorb functions of traditional SaaS products, investors and entrepreneurs are shifting focus back to tech-enabled services. Integrating AI deeply into physical services and workflows is now seen as creating more defensible, lasting value than pure software, reversing a years-long trend.

Ben Thompson's analysis suggests the era of siloed SaaS growth is over. With AI enabling infinite software creation, companies will be forced to attack adjacent business functions to grow. This shifts the market from collaborative expansion to a competitive battle for existing customer spend, with AI model providers as the key "arms dealers."

The 'SaaS-pocalypse' narrative is flawed because IT/SaaS is only 8-12% of enterprise spend. Companies will use powerful AI models to create value in the other 90% of their business—like operations and sales—rather than just rebuilding core software like ERPs or CRMs where the financial upside is limited.

Anthropic's and OpenAI's massive revenue forecasts ($300B+ combined) aren't about displacing existing software spend. The core bet is that AI will capture a large portion of the trillion-dollar consulting and services budget, dramatically expanding the total addressable market for technology.

Foundation models like OpenAI won't dominate the enterprise application layer. Similar to how AWS became infrastructure for a software explosion, LLMs will do the same for AI apps. Their core business and GTM motion is fundamentally different from what's required to sell complex enterprise solutions.

The fundamental shift from AI isn't about replacing foundational model companies like OpenAI. Instead, AI creates a new technological substrate—productized intelligence—that will engender an entirely new breed of software companies, marking the end of the traditional SaaS playbook.

Contrary to the "SaaS-pocalypse" fear, Nvidia's CEO believes AI agents will boost the software industry. He argues agents will use existing tools like databases and calculators rather than replace them. This suggests a future of AI-driven augmentation, where agents become users of and distribution channels for specialized SaaS products.