At the India AI Impact Summit 2026, legendary venture capitalist and Khosla Ventures founder Vinod Khosla called for a stunning awakening for the global tech industry by addressing the conference on the ground. Khosla warned how these traditional Business Process Outsourcing (BPO) and Information Technology (IT) services models which have long been the backbone of India’s economic growthwould effectively "disappear" within five years.
“There will be no more BPO. IT services would be completely replaced over the next five years,” Khosla said in an address to industry executives and founder-entrepreneurs. “Every one of those companies in th e world could do this in half as many people but isn’t sure how to yet. “We see productivity gains of $5\%$ to $500\%$ coming out of AI,” adding that at the same time $80\%$ of traditional jobs could be automated in production.
A Deflationary Future
Khosla said a “hugely deflationary” economy was coming. By the 2030s, he foresees “thinking work” becoming virtually free, performed by AI agents capable of executing junior assistants, accountants and even architects for as little as a fraction of what they now work for. Yet he was quick to assure that “disappearing” does not spell the end of the industry but a radical overhaul.
India’s Turn: From Services to Products
Though conventional roles remain dismal, Khosla is optimistic India can weather the storm. "We need India to stop being the back office" of the world and instead become the center of the world and all things AI transformation services."
- Sovereign AI - He stressed that India should take the lead in implementing its sovereign AI models (like Sarvam) instead of depending on US tech.
- Social Impact: Khosla had advocated the importance of AI, which could be added to India's social ecosystem (such as Aadhaar) to cover healthcare, education, etc.
- New Export Model: "The 250 million young people in India should be selling AI-based products and services to the world,” he said, noting that while it's traditional IT that wanes, a trillion-dollar opportunity in AI-driven engineering is emerging.
He cautioned that traditional economic indicators like GDP will soon be inadequate to measure the real value proposition of a world where the basic services legal advice, medical diagnosis will be largely free.
As the summit comes to a close, the message for the Fortune 500 and “Big Tech” Indian magnates is clear: change your business model to “AI-first” within five years or face accelerating extinction.
