AI Summit 2026: ‘IT, BPO services will disappear in five years’, says venture capitalist Khosla. india news

Edited excerpts:

From founding Sun Microsystems to leading your own venture capital firm, you’ve had a long journey in Silicon Valley over the past 50 years. Tell us something about it.

Well, the day I graduated from IIT, I had a dream to start a startup of my own, because I heard about Andy Grove, a Hungarian immigrant who was starting a company called Intel in Silicon Valley. I found my way to Silicon Valley and started my first company, which was pretty successful, but people don’t know about it. It went public, and then I started Sun Microsystems right after that, and I’ve been in the business of enabling entrepreneurs, helping entrepreneurs, helping entrepreneurs their whole lives, helping build big impactful companies and create social impact. So that’s my area of ​​interest, how I got there. It’s always trying to make the things happen that you want to happen.

You first moved to America in the 1970s. You must have been one of the very few Indian entrepreneurs in tech and Silicon Valley, a stark contrast to what we see today. what was that like?

Well, the startup ecosystem was very, very different in 1980 when I started my first company. This wasn’t some 20-year-old guy starting a company. It was established people who were starting companies because only they could get large amounts of funding to start a company. So my approach was very simple. Just do it. Don’t worry about rules, regulations, prejudices, all that. Just ignore it and just start a company, which is what I did, and I mostly ignored everything else.

You have been writing about the impact of AI on the global economy for some time. You have argued that artificial intelligence is a revolution that is completely different from what we have seen in the past. Talk to us about that.

Well, previous changes like the Internet and smartphone revolutions were actually massive changes in platform technology, and each enabled a class of applications and uses and companies. That’s why the Internet enabled companies like Google and Amazon. Mobile phones enabled companies like Airbnb and DoorDash and Uber. AI is enabling a new class of companies. The interesting thing about AI is that previous technologies helped perform various tasks. AI is building on human intelligence, where it’s very likely that in the next five years, AI will be better than most humans at most things. There is little where humans would be substantially better off. I am not including areas like art and literature and song, and these will be areas of opportunity for all human beings. But in the context of economic functions, AI will be able to do so. So this is a massive transformation of the US economy as well as the global economy. I think AI can significantly increase productivity in the next five years.

What will a world economy enabled by AI look like in 10 to 15 years?

So very simply, the first step is that almost all expertise will be AI. And AI workers will be able to do accounting. They will do better accounting than accountants. An AI worker can be a therapist, a doctor, an oncologist, a mental health therapist, a physical therapist. There will be AI chip designers, architects and sales people. Now, before then, there will be AI workers who can work as junior assistants or apprentices to human architects or human physicians. The next wave of big revolution coming is robotics. So most of the labor — it doesn’t matter whether it’s cleaning dishes in your kitchen or working on an assembly line or working as a farm laborer — robots will do that work, and I think they’ll take five years to mature. They are about five years behind in intellectual work or thinking work. The question is what effect does this have on the economy? The biggest impact will be on jobs. But it would also be so much easier and cheaper to do things, you know, robotic labor would cost two or $3 an hour, not $20 an hour. So my bet is that you will see a decline in inflation globally by 2035 and then a major deflationary economy.

Doesn’t this mean that AI will lead to massive concentration of wealth in the hands of the elite? Doesn’t massive job loss also create space for political backlash and the rise of authoritarians?

It is quite clear that when a person, who is 22 or 25 years old today, turns 40, there will be very few jobs. And there are no two ways about it in any comparable capitalist economy. Now there is good news and bad news too. AI can provide a doctor to every Indian at almost no cost. AI can provide a tutor to every Indian child and adult at almost no cost. AI can provide a lawyer to every Indian so that they can claim their legal rights, have access to the law. So there are a lot of good things. AI can make entertainment almost free in a country like India, and these are all extremely deflationary kinds of endeavours. Now the government needs to redistribute its benefits. So redistribution is a bad word, but if there is unlimited production of goods and services, like medical care, like education, like transportation with self-driving cars, then there are no jobs, but these services become essentially free, and governments will be able to provide a much higher minimum standard of living. If the Indian government does this by 2030, some of these services may be free and so I am looking forward to the India AI Summit in February.

What does AI mean for a country like India that wants to create millions of jobs? Is its deployment politically sustainable if it leads to large job losses?

Politics and policy will vary widely over how AI is deployed. There are countries that will slow it down. Germany is an excellent example of this. But to your question, I think focusing on job creation may not be the right answer. Focusing on education for the purpose of getting a job may not be the right answer, as AI will do it better. Now there will be a transition period where I will focus on when humans and AI are working together. In a decade and a half, India can become the largest exporter not of IT services but of AI based goods and services to the rest of the world. IT and BPO services will almost certainly disappear within the next five years. Therefore, India’s 250 million youth should sell AI-based products and services to the rest of the world as they become visible in the job market. I think that’s where the economic opportunity has to go. Almost no economist or business manager is thinking about it. This is a huge threat and we cannot ignore it.

Is there a possibility that AI will also allow the US and China to take advantage of this new technology at the expense of India and the rest of the world?

I think that’s a real threat, and it would be bad if that technology were very narrowly focused on two countries and came from two countries. India has enough talent to develop these technologies. Today’s models of AI focus on large language models. I don’t think this is the final chapter. Other models of AI are possible and will emerge in the next few years and India may lead the way. So developing AI is a difficult question, but I think India should try and win that race. Then there is the question of implementing AI. For example, you can create a Flipkart on someone else’s internet. There will be applications of AI that India should definitely make a serious effort on. I’m very interested in this, because we have a company called Sarvam that is building Indian AI models. Countries should have sovereign models, certainly for national defense, but also for other purposes. In short I would say that everything is ready. None of the old notions will persist in 10 years. This has serious implications. Look, China was quite ahead in this matter about four or five years ago, when they adopted their last five-year plan. They made victory in AI an objective of the five-year plan and they are implementing it. India should also think from this perspective.

A question about politics because you are a major political donor. Many Indians feel less welcome in the US due to more restrictive policies towards professionals and students. Has America changed?

America passes through waves. In the 1970s and 1980s, when I first came here, you were still a foreigner, and you heard all the stories of prejudice against foreigners and other people. But then in the 1990s and early 2000s it went through a period where immigrants were accepted. There was such a huge frequency of Indian doctors, engineers, CEOs and big companies. But in America the left took the ideas of diversity, equality and inclusion to extreme levels. I think they have done a lot of damage. I’m an independent, not a Democrat. I used to be a Republican, but I believe climate is a big enough issue that I became independent. I don’t have left or right politics. I live in the middle. I think the left has done a lot of damage and is still taking the same stance. Mamdani in New York is a good example. But I think the backlash that led to Trump will go away. I don’t think this will last very long. He is an unscrupulous person who lies and cheats and will do anything. I would not have imagined anyone threatening to invade Greenland. But that too shall pass. I think you’ll see a reaction and more movement towards the middle.

We have also seen restrictions on H1B visas with the argument that foreign professionals are taking American jobs. Your opinion?

This is a very naive, naïve understanding of what actually happens and how value creation and innovation happens. Look, in the last 25 years in America, the percentage of GDP growth coming from innovation has been very large. I estimate that 40% of all growth comes from innovation. And the innovation economy was driven by H1B visas. In the 1970s, we called this brain drain from India to America. I was guilty of that. Recently, you have seen people migrating back to India, and it is good for India to bring their expertise and knowledge back to India. This exchange is very healthy for the global economy, but Trump has stopped it. He doesn’t understand that this is about creating jobs through the innovation economy. That’s why I think Trump’s policies are going to cause long-term damage. They have mixed up legal immigration with illegal immigrants or immigration. Illegal immigration is not good for the country. Legal immigration, by contrast, is very good.