Sridhar Vembu On Why AI Is Not Creating New IT Jobs - Rediff

URL SCAN: Sridhar Vembu On Why AI Is Not Creating New IT Jobs - Rediff
FIRST LINE: Zoho Corporation Founder Sridhar Vembu reveals how the rising costs of artificial intelligence and data centre infrastructure are hindering new job creation in the IT industry, posing a significant structural challenge to global economies.

The Dissection

This article records an early symptom of labor’s displacement: money that once financed employees is being redirected into AI systems, data centers, and infrastructure. It also identifies software-market saturation, enterprise budget diversion, automated manufacturing, and rising pressure for income transfers.

But it frames a terminal structural break as a distribution problem. The wage-consumption circuit is being severed, and the article asks how to preserve consumption after productive participation collapses.

The Core Fallacy

It treats AI costs, uncertain capex returns, and software saturation as possible limits on automation. Under Discontinuity Thesis mechanics, these are delays, not reversals. Firms will continue automating because competitive pressure makes human labor an avoidable cost, even when the AI investment cycle is temporarily unprofitable.

UBI is also miscast as a solution. It can preserve purchasing power, but it cannot restore bargaining power, productive necessity, or ownership. It is a consumption bridge over a labor-market graveyard.

Hidden Assumptions

• Avoiding mass layoffs means employment remains viable. In reality, hiring freezes and budget diversion can precede visible layoffs.
• More software demand will eventually create enough new work. Saturation makes that increasingly implausible.
• Weak AI-company profits will restrain deployment. Competitive compulsion can force adoption regardless of short-term returns.
• Manufacturing can absorb displaced IT workers. Automation makes this fallback structurally weak.
• Political transfers can expand indefinitely without changing ownership of AI capital.
• Institutions can preserve large-scale human-only economic domains despite superior machine performance.

Social Function

Classification: partial truth, transition management, and ideological anesthetic.

The piece correctly acknowledges that employment is failing to keep pace with productive capacity. It softens the implication by converting the ownership crisis into a question of affordable goods and future government payments. “Freebies” and UBI become sedation for a population excluded from production, while control of the productive machinery remains largely unexamined.

The Verdict

Vembu sees the smoke: capital is replacing labor allocation, software demand is saturating, and automation is producing goods without producing jobs. The article does not name the fire: once AI achieves durable superiority, the wage-to-consumption system loses its foundation.

This is a correct but incomplete autopsy. UBI may stabilize demand, but it does not resurrect the worker. Under P1–P3, IT job growth can be mechanically dead long before mass layoffs make the death socially visible.