Refuting the "AI disrupts software" claim: Cadence (CDNS.US) CEO says AI is a growth "turbocharger" rather than a threat

According to Jinse Finance, Cadence (CDNS.US), the global leader in Electronic Design Automation (EDA), sees artificial intelligence (AI) as a growth driver rather than a threat, said its President and CEO Anirudh Devgan on Tuesday.

Devgan stated, “Combining AI with Cadence is akin to installing a turbocharger,” “Our foundational tools are like V6 or V8 engines; AI itself cannot independently accomplish these tasks.”

Although the semiconductor industry is booming and Cadence reported strong financial results in July, Cadence's share price has still declined by 11% over the past year. The stock has been caught up in a broader software sell-off, as investors fear that AI might disrupt traditional software companies. However, Devgan asserts that these concerns overlook Cadence's irreplaceable role in designing increasingly complex chips—chips that are powering the expansion of AI.

Devgan said, “We are an indispensable part of the semiconductor industry.”

Cadence provides software and other tools for designing semiconductors and has established partnerships with major chip manufacturers including NVIDIA and Intel. As chips become more complex and more tech companies start designing custom chips themselves, Devgan expects demand to grow further.

“The demand for our products only increases, not decreases, and will continue to grow over the next 5 to 10 years,” he stated.

Devgan pointed out that AI cannot replace Cadence's core tools because designing advanced chips—some of which have 200 billion transistors at the 3-nanometer process—requires precise physics and mathematics. Instead, Cadence is integrating AI into its products to help customers explore more design possibilities and manufacture more efficient chips.

“What customers want is improved chip performance. If it’s 3 GHz, they want to reach 3.5 GHz; if it’s 10 watts, they aim to tune it to 90 watts,” Devgan said. “This is an optimization problem, and AI can provide more scenarios we can run and use to achieve performance improvements.”

Beyond the current data center boom, Devgan sees even greater opportunities in "Physical AI"—that is, applying AI to machines that interact with the physical world. He noted that autonomous vehicles, drones, and robots are the primary prospective markets, all needing dedicated chips and increasingly sophisticated electronic systems.

“Over the next few years, the number of electronic devices and semiconductors in cars is expected to grow 10-fold, which will create a large number of new customers,” Devgan stated.

He sees even greater potential opportunity in the field of robotics, describing humanoid robots as "the largest product category ever."