Infosys co-founder NR Narayana Murthy has cautioned against what he describes as the “exaggerated” claims surrounding artificial intelligence (AI) in India. Speaking at TiEcon Mumbai 2025, Murthy emphasized that poverty can only be tackled through innovation and job creation rather than government handouts.
“I find that most of the so-called AI I see is silly and old programming,” Murthy stated. “It has become a fashion in India to talk of AI in everything. Ordinary programs are touted as AI.”
Murthy highlighted that true AI is based on two key principles: machine learning, which enables large-scale correlation for predictive analysis, and deep learning, which mimics human brain functions through unsupervised algorithms.
“Unsupervised algorithms using deep learning and neural networks hold the greatest potential to mimic human intelligence,” he added.
AI and Job Creation: The Need for Assistive Implementation
Acknowledging that every technological advancement results in job displacement, Murthy stressed that AI should be implemented in an assistive manner to promote economic growth.
“In each tech evolution, certain jobs will be eliminated, but if used in an assisted manner, we can grow the economy,” he explained. “AI, for example, if used in autonomous transport or hospital care, can lead to the expansion of these industries and create jobs.”
Murthy also urged startups to set global benchmarks and hire talent that surpasses their own expertise.
“In the beginning, it looks impossible, but the moment the mindset shifts, progress will follow,” he asserted. “That’s how you solve problems—not with freebies. Our poverty will vanish like dew on a sunny morning. Every startup that failed did not follow this.”
Compassionate Capitalism: Murthy’s Critique of Government Freebies
A known advocate of compassionate capitalism, Murthy criticized government freebies and argued that subsidies should be linked to measurable outcomes.
“If subsidies are provided, they should come with expectations. If free electricity is given for six months, at the end of it, we must assess whether children are studying more and if their school performance has improved,” he suggested.
Offering advice to entrepreneurs, he stressed the importance of earning respect from all stakeholders, including customers, employees, investors, and regulators.
“If you prioritize benefiting society, you’ll gain repeat business, employees will join you, investors and vendors will stand by you in tough times, and politicians will want you to succeed,” he added.
The Looming AI Threat: Atomberg Founder Warns of a Middle-Class Crisis
Echoing similar concerns, Atomberg founder Arindam Paul issued a stark warning about AI’s impact on white-collar employment in India. Taking direct aim at India’s IT and BPO sectors, Paul cautioned that they could experience a “big reduction in manpower and, in many cases, in their business.”
“Almost 40-50% of white-collar jobs that exist today might cease to exist,” Paul wrote on LinkedIn. “If this happens, it could mark the end of India’s middle class and its consumption-driven economy.”
He criticized the country’s failure to develop a robust industrial base that could provide alternative employment opportunities.
“Our manufacturing sector is nowhere near where it should be in generating jobs that pay between 3-6 lakhs per year,” he noted.
Paul also called out corporate leaders for celebrating AI-driven efficiency without considering its long-term consequences.
“While all corporates are happy that AI will reduce manpower, increase efficiency, and improve bottom lines, they forget that without jobs and money in consumers’ hands, there will be no topline growth,” he warned.
Zoho’s Sridhar Vembu Sounds Alarm on IT Job Market
His concerns were echoed by Zoho co-founder Sridhar Vembu, who has also expressed pessimism about the future of India’s software jobs in an AI-driven world.
“I don’t think most people, including our leaders, still understand how big a threat AI could be to our economy,” Paul cautioned.
Vembu added that even before factoring in AI, India’s IT industry faces challenges due to “massive over-capacity” and “multiplied inefficiencies” in outsourced services. “AI could eventually devour much of the boilerplate code that drives large IT projects,” he warned.
A Call for Manufacturing-Led Growth
While Paul hopes his predictions do not come true, he believes India must urgently prioritize manufacturing to prevent the worst-case scenario.
“I hope none of this happens and we continue to grow our GDP at both an absolute and per capita level. But unless we really double down on manufacturing, this is the most probable scenario for India,” he concluded.
