Zoho co-founder Sridhar Vembu has publicly raised concerns about artificial intelligence ‘wiping’ jobs, warning that India must urgently find answers to safeguard its massive youth workforce. In a post shared on social media platform X(formerly known as Twitter) Vembu mentioned that the real issue facing the nation right now is how to create jobs in an uncertain global landscape, noting that the IT industry including Zoho has not generated any significant new employment in the recent years. Vembu further explained that money which was once earmarked for new employees is now being spent on AI and rising data center costs, driven by steep increases in server and memory prices. He further noted that while Zoho has avoided layoffs, but admitted that the company is also not expanding its workforce. “AI allows us to produce more software quicker, but does the over-saturated global software market need a lot more software?” he asked, adding that growth in the sector will be slower as focus shifts to quality and brand.
Vembu feels Sam Altman’s Universal Basic Income can be a solution
Vembu further argued that while automation makes goods cheaper and more accessible, the challenge is ensuing people have income to afford them. He also pointed to Universal Basic Income (UBI) as one possible solution, referencing Sam Altman’s $14 million investment into UBI research. “Some people think the answer is UBI, and some of that is already happening in India — we call them freebies. We can expect the political pressure to do a lot more. Is there a better answer?” Vembu asked.For those unaware, Sam Altman’s Universal Basic Income (UBI) theory is rooted in the idea that as artificial intelligence and automation eliminate traditional jobs, societies will need a safety net to ensure people can still afford basic necessities. He believes UBI — guaranteed cash payments to all citizens — could be one of the most viable solutions. As CEO of OpenAI, Altman has long warned that AI could displace millions of jobs. He argues that while automation makes goods cheaper, people still need income to buy them. Altman invested $14 million through OpenResearch, alongside $10 million from OpenAI, to run one of the largest UBI trials in the U.S.
Read Zoho co-founder Sridhar Vembu’s complete post here
The real issue facing our nation is how to create jobs for our massive cohort of youth in this very uncertain global landscape. Sadly, the IT industry, including Zoho, have not created many jobs in recent years. We have not laid off people but we are not creating new jobs either. The money that would have gone to new employees is now going to AI and data center costs, the latter due to the steep rise in server and memory prices. We are trying to control those costs but a lot of that is out of our control.While AI allows us to produce more software quicker, does the over-saturated global software market need a lot more software? Like any commodity industry, the focus shifts to quality, reliability, brand and so on and growth will be much slower.Software customers (large and mid-sized enterprises) also have redireced their own IT spending towards AI. Even the AI companies which are growing very rapidly are borrowing and spending huge amounts of money in capex, and it is not clear they will achieve the massive profits they need to justify all the capex.What other industry can pick up the slack? Extensive automation means that large scale manufacturing produces few jobs.As an economic thinker, this is a good thing: ultimately all kinds of goods, including advanced tech products become very affordable because production becomes so cheap. The “only” question is how the economy is structured so people have the income to afford those affordable goods.That “only” question, simple in theory, is not easy in practice. Some people think the answer is Universal Basic Income (UBI) and some of that is already happening in India (we call them freebies). We can expect the political pressure to do a lot more.Is there a better answer? Continued …
