Tech billionaire and venture capitalist Vinod Khosla has issued one of the boldest predictions yet on artificial intelligence (AI). He warned that India’s IT services and business process outsourcing (BPO) sectors could “almost completely disappear” within five years as AI systems rapidly outperform human expertise.
His remarks come at a critical moment for India’s outsourcing economy. The country’s IT and BPO services market is projected to hit $214.8 billion between 2024 and 2029, at a compound annual growth rate (CAGR) of 12.3%. This will be primarily driven by rising cost pressures forcing enterprises to move away from maintaining in-house IT systems. Against that growth, Khosla argues that AI could fundamentally disrupt the very model fueling this expansion.
Speaking ahead of the India AI Impact Summit 2026, Khosla said AI will dismantle traditional outsourcing and eliminate most expertise-based professions within 15 years, even as it democratizes access to healthcare, education, and legal services.
AI’s expanding capabilities
Khosla, co-founder of Sun Microsystems and founder of Khosla Ventures, described AI as a technological shift far more consequential than the internet or smartphone revolutions.
“In the next five years, AI will be better than most humans at most things,” he said, predicting disruption across accounting, medicine, engineering, sales, chip design, and other knowledge-based professions.
Khosla suggested AI agents will initially function as junior assistants to human professionals before taking over more complex tasks. He also forecast that robotics will lag behind intellectual automation by roughly five years, automating large segments of physical labor within the next decade. “By the time today’s 25-year-olds are in their 40s, there will be far fewer jobs,” he warned.
His remarks come at a pivotal moment for India’s technology sector, which has long relied on a headcount-driven outsourcing model. Market analysts have already noted volatility in IT stocks amid concerns that AI-powered automation could structurally weaken demand for traditional services.
From services to AI products: A strategic pivot
Despite his stark warning, Khosla framed AI as a strategic opportunity for India if the country pivots quickly. He urged India’s estimated 250 million young people to move beyond job-oriented IT services and instead build and export AI-based products and platforms.
“India could become the largest exporter of AI-based goods and services, not IT services,” he said, emphasizing the importance of developing sovereign AI models to avoid reliance on U.S. and Chinese technologies.
The broader India AI Impact Summit 2026, centered on “People, Planet, and Progress,” aims to position the country as a global AI leader while addressing the societal implications of automation.
Khosla highlighted AI’s deflationary potential. AI-powered doctors, tutors, and legal assistants could make essential services nearly free, dramatically improving access in emerging economies. However, he cautioned that governments must proactively manage job displacement and ensure productivity gains translate into social benefits.
His message: AI adoption will not be gradual. It will be disruptive, compress costs, challenge labor-intensive models, and force economies to rethink how value is created.
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Business Today Desk. (2026, February 18). Vinod Khosla warns AI may wipe out India’s IT, BPO services,
even as IT stocks rebound. MSN. Retrieved from https://www.msn.com/en-in/money/topstories/vinod-khosla-warns-ai-may-wipe-out-india-s-it-bpo-services-even-as-it-stocks-rebound/ar-AA1WwHQE?ocid=finance-verthp-feeds
Technavio. (2025, January). India IT and BPO Services Market Size to Grow by USD 214.8 Billion from
2024 to 2029. Retrieved from https://www.technavio.com/report/it-and-bpo-services-market-in-india-industry-analysis
