Vinod Khosla warns IT services must adapt to AI or face extinction as industry leader rebuts

AI services a real opportunity for IT to adapt, move fast

Vinod Khosla says AI could transform the world into an era of abundance, where people need not work and can pursue their passions. He warns that India's IT services industry must adapt quickly to offer AI services globally or risk obsolescence. The country's talent and cost advantages create a major opportunity. The AI revolution will lead the world to an era of abundance where people will not have to work and will have the freedom to pursue their passion, Vinod Khosla, founder of Khosla Labs told ET's Swathi Moorthy and Surabhi Agarwal in an interview. About his doomsday prediction for the IT services industry, the Indian-American technocrat and venture capitalist said Indian services companies have a "real opportunity" to offer AI services all over the world, but they have to move fast and adapt quickly to save themselves from extinction. He also called the launch of the latest model by homegrown Sarvam as ahead of where DeepSeek was a year ago. Edited excerpts: You made a strong statement yesterday that perhaps by 2030, there will be nothing like the IT services or BPO industry anymore. What does it mean for India's economy? The thing with technology is that either you change with it and leverage it, or it leaves you behind. The notion that there will be IT services over some period, whether it happens by 2030 or 2035, is hard to predict. The idea of providing software services to western enterprises will go away. AI agents can do any BPO work, probably more accurately and faster than almost any human. One of the things Indian companies can do is to say, 'We won't hold on to that business but we will hold on to those customers and provide them new services.' More importantly, the world isn't as well equipped to adapt to AI as India is, especially the developing world. They have either very high costs in the West or very little knowledge, like in Africa or Southeast Asia. Indian services companies can do AI services all over the world, and that is the real opportunity. But only those who move rapidly will take advantage of it, and it will probably be a bigger opportunity than what they're leaving behind. India is a money-poor but people-rich and time-rich economy. With artificial general intelligence (AGI) pegged to arrive in the next 2-5 years, with job displacement in tow, what does it mean for India? I think the next five years will look very great to economists. They measure productivity and GDP growth, and that looks great. At some point...and my bet is from 2030 to 2040, we will see strong political forces and politics influencing whether AI gets adopted in each country. You will see chaotic policies, politicians pushing certain benefits, and saying there can't be job losses, which will slow down AI adoption. But I have no question that GDP growth will accelerate because of it. But because productivity is growing, you might see job losses or disruption in jobs. People will have to change what they do dramatically. When you get into the next 15 years, from 2040 to 2050, I think there will be such a large production of goods and services that things like food will be cheap, and entertainment will be cheap. I know it sort of seems odd to believe, but by 2050, it's going to be very exciting. It will truly be an era of abundance if politics allows it to happen. You had a meeting with the prime minister yesterday. What can you tell us about the discussions? The main thing is the idea that AI can make it possible to give every Indian a personal doctor who is available to them 24x7 and provide a level of healthcare that has not been possible and is affordable, at a cost much lower than what healthcare costs in India are today, and probably implemented through a system like Aadhaar. The other thing is that all 250 million children, and every adult learner, can use AI tutors for education. There are many Indian farmers, hundreds of millions of them, working on small plots. They can have a PhD-level agronomist available to them for free. These are not things we have to wait for in the future. I think they're available as soon as we adapt them from what is being done in the West for our country. A lot of investment as well as tech creation is currently dominated in the US and China. What does this mean for the Global South and India? 2047 coincides with the independence anniversary. I think that's a good time to shoot for a future where nobody in India needs a job. If you're a farm worker labouring in 110-degree heat, it's not really a job. It's servitude to survival. If those things go away, if there's lots of production of goods and services, that's what people need. So, can the bottom half of the Indian population have a 10x better standard of living than we have today by 2047 without having a job? Yes. I do think by 2047, which would be an awesome goal for India, we can declare minimum standards of living in the country that are so high that nobody needs to worry about survival.

The Future of IT Services: A Rebuttal to Vinod Khosla's Predictions

Introduces Vasu AI Coach, LE AI Interviewer and LE AI Quality Compliance Specialist under LE AI, its proprietary AI infrastructure for global education and careers Ashok Soota founder and executive chairman of Happiest Minds Technologies Vinod Khosla stated that IT services and BPO roles will vanish within five years, with AI tools taking over tasks currently handled by human workers. He also argued that by 2030, traditional IT services and outsourcing will effectively disappear, replaced by AI-native services. He also said that by 2050, most expertise-based professions -- including medicine -- could be disrupted, with AI taking over roles in areas such as accounting, oncology, therapy, chip design, architecture, and sales. I am a strong believer in AI's role as a powerful tech enabler rather than a human replacement. The notion that IT services will disappear in five years ignores the lessons of history on how technology has always evolved to create newer opportunities. At both my companies i.e Happiest Minds and Happiest Health, we see AI as a catalyst for accelerating growth, enhancing productivity, and driving innovation across enterprises. IT services will remain essential in customizing solutions for diverse industries and ensuring enterprises innovate faster and achieve superior business outcomes. AI is transforming IT services into higher-value offerings, empowering us to deliver smarter, faster, and more cost-effective solutions. The industry is not dying; it is growing as the essential partner for enterprises and startups navigating the disruptive AI age. Even in my not-for-profit medical research trust, SKAN, I see AI enlarging the scope of research we can do, thereby increasing the market for IT Services. Moreover, predictions that doctors will lose their jobs in the coming decades underestimate the human aspect of healthcare. AI is being used as a powerful tool that empowers doctors by freeing them from routine tasks, not replacing them. From diagnostics to treatment planning, AI is processing vast amounts of medical data, identifying correlating patterns, and providing actionable insights. Reports from the WHO and WEF has also highlighted that while AI improves diagnostics, planning, and efficiency, it requires strong human oversight. Also, KPMG's 2025 GenAI Healthcare Sector Value Report shows that 65% of organizations are already reporting ROI from AI, with 92% of organizations believing that embracing AI will give them a competitive edge over those who do not. The entire Indian IT industry and many enterprises have completely embraced AI. Doctors and experts are emphasizing AI's complementary role in medicine and not replacing human judgement and skill. Truly, the complex decision-making, trust, and personalized care that doctors bring to patients cannot be replicated by machines. The future of healthcare lies in a symbiotic partnership between human expertise and AI innovation, leading to better outcomes, improved efficiencies, and healthier communities. Vinod Khosla's remarks risk undermining the credibility and confidence of India's flourishing IT industry, which continues to play a vital role in global business transformation. It is essential to highlight how AI is augmenting our capabilities, creating new opportunities, expanding our markets and strengthening India's position as a global technology leader. Far from dying, IT services are becoming the trusted bridge between cutting-edge AI and real-world enterprise needs.