Tech billionaire and venture capitalist Vinod Khosla has warned that artificial intelligence could eliminate large sectors of white-collar employment with IT services and business production outsourcing (BPOs) being the most affected. He said that AI systems are “rapidly nearing a point where they can outperform humans in most economically valuable tasks.”
He argues that as AI evolves from assistants to autonomous “workers,” expertise-driven professions, including accounting, law, medicine and chip design, face deep disruption within the next decade or two.
Khosla said that the current AI wave is fundamentally different from other technology shifts like smartphones or the internet because AI “replicates cognitive labor itself.” He called it a transformation that could unlock dramatic productivity gains over the next five years.
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Khosla, who’s the co-founder of Sun Microsystems and the founder of Khosla Ventures, was speaking to The Hindustan Times ahead of the India AI summit which begins on Monday and runs through Feb. 20. He discussed the impact on India, where IT and BPO services are major engines of white-collar employment. He urged a pivot away from traditional outsourcing toward building and exporting AI-native products and services. He said India’s large young workforce should focus on developing AI-driven solutions for global markets rather than relying on labor-arbitrage models.
Khosla also claimed that AI has the potential to reduce the cost of essential services, adding that the economic impact would depend on policy choices. While AI has the potential to make high quality healthcare, tutoring, legal support, and other knowledge services widely accessible at minimal cost according to him, it can also fuel large-scale job loss that might widen inequality and fuel political backlash if productivity gains are not broadly shared.
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Countries that move quickly to build sovereign AI capabilities, including foundational models tailored to national needs, will be better positioned in a landscape likely to be dominated by the U.S. and China, he said.
Calling AI a once-in-a-generation shift, Khosla said the technology will reshape global competition and labor markets far faster than most governments and businesses expect.
Khosla recently used X to outline his most ambitious ideas regarding AI. In the X thread, he explored progress across AI, sustainable energy, healthcare, and education. He stressed that despite these breakthroughs, society is only at the beginning of this technological revolution, with much more change still to come.