Zoho founder Sridhar Vembu raised concerns about the global economy and warned that the world may be entering a difficult phase despite the rapid rise of artificial intelligence (AI). In a post shared on X, he questioned why even college students in the US have started showing resistance towards AI despite the country leading the global AI race. According to him, the problem is being worsened by companies increasingly linking layoffs and cost-cutting measures to AI adoption.
He wrote that companies often blame job losses on AI because it helps them appear “visionary” while also providing a convenient explanation for workforce reductions.
Vembu said the global system built after World War II is gradually weakening. He argued that AI alone cannot solve deeper economic and political problems facing countries today.
His remarks come at a time when technology companies across the world are increasing investments in AI while also cutting jobs and restructuring teams.
AI costs and layoffs are rising
According to Vembu, many companies are spending heavily on AI infrastructure, servers, and advanced chips. He said AI-related expenses have increased sharply, forcing businesses to reduce employee costs to balance spending.
He also supported claims made by a Meta engineer who suggested that layoffs in the tech industry may continue as companies struggle to fully benefit from AI tools.
Sridhar Vembu explained that while AI can help developers write code faster, companies are still finding it difficult to turn that productivity into real business growth. He noted that producing more code does not automatically lead to more customers or higher revenue.
The Zoho founder added that many firms are now under pressure to manage rising operational costs linked to AI adoption.
“AI is not the full solution”
Vembu believes the larger problem is economic distribution rather than technology itself. He said automation may increase production in the future, but governments and businesses will still need to ensure people have stable incomes and purchasing power.
He also warned against blindly believing the current AI hype, saying the real-world impact of AI is still evolving. According to him, industries and policymakers need to prepare for long-term economic changes instead of depending entirely on AI-driven growth.
Focus on human skills
Despite concerns around automation, Sridhar Vembu said human-focused professions such as caregiving, farming, cooking, and creative work could become more valuable in the future. He stressed that technology should support society rather than replace people completely.