Nvidia CEO Jensen Huang Says "The Markets Got It Wrong" on Software Stocks
Huang went on to suggest that people should think about agentic AI in a similar way to how they would imagine physical robots behaving. Eventually, he suggests, when people have robots in their homes, it's unlikely that those robots will reinvent the products and tools they require to perform tasks. For instance, he said, if a household robot is tasked with heating up food, it's unlikely that it will try to come up with another version of the microwave; it will just use the microwave that is already in the kitchen.
Ultimately, Huang expects that agentic AI tools will assist humans and increase their productivity. If software engineers don't have to spend as much time writing actual code, but can direct agents to write code the way they want, they will be able to complete their work much more efficiently than before.
Is Huang's argument logical?
I think Huang's argument that AI will prove to be more of an assistant than a product replacement makes some sense. Think about how the internet enabled people to complete tasks remotely that they normally might have had to travel for, giving them more time to do other things. The internet also spawned many new jobs and companies.
However, I think it's not clear right now where these new jobs will come from. If AI can write computer code on command, presumably, fewer software engineers will be needed.
Citadel Securities market strategist Frank Flight recently wrote in a blog post that job postings for software engineers are on the rise, as is new business formation. However, the question becomes whether those new jobs can truly offset the level of job losses from the automation that is on track to occur. I haven't seen many experts really answer this question with anything more than a vague assertion that there will be new opportunities as a result of AI and that humans won't completely innovate themselves out of the labor market.
Until there are more specifics, I think many consumers will remain worried, and many software stocks will remain under pressure if investors believe their moats are being destroyed by fast-emerging AI technology.
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Nvidia CEO Jensen Huang Says "The Markets Got It Wrong" on Software Stocks was originally published by The Motley Fool
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