Vembu warns AI costs curb IT hiring

Sridhar Vembu, founder and chief scientist of Zoho Corporation, posted on social media platform X that the IT industry, including Zoho, is not creating many new jobs because funds are being diverted to cover rising costs of artificial intelligence (AI) and data centre infrastructure. He noted that while the industry has avoided large-scale layoffs, it has failed to generate significant new employment in recent years. Vembu questioned whether the over-saturated global software market needs more software, and observed that enterprise customers are redirecting their IT spending towards AI. He expressed uncertainty about whether AI companies will achieve the profits needed to justify their heavy capital expenditure. He also doubted that manufacturing could absorb the workforce due to automation, and highlighted the structural challenge of income distribution, suggesting that political pressure for measures like Universal Basic Income may increase.