Most outsourced coders in India will be gone in 2 years due to A.I., Stability AI boss predicts
OpenAI Dall E 2 on a phone with an AI brain illustration seen on the screen behind.
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Most outsourced programmers in India will see their jobs wiped out in the next year or two, Stability AI CEO Emad Mostaque said.
Mostaque, on a call with UBS analysts, said that most of the country’s outsourced coders will lose their jobs as the effects of AI mean that it is now possible for software to be developed with far fewer people.
“I think that it affects different types of jobs in different ways,” Mostaque said on a call with analysts at the Swiss investment bank last week.
“If you’re doing a job in front of a computer, and no one ever sees you, then it’s massively impactful, because these models are like really talented grads.”
According to Mostaque, not everyone will be affected in the same way, however.
That is due in no small part to differing rules and regulations around the world. Countries with stronger labor laws, like France, will be less likely to see such an impact, for example.
In India, Mostaque said, “outsourced coders up to level three programmers will be gone in the next year or two, whereas in France, you’ll never fire a developer.”
“So it affects different models in different countries in different ways in different sectors.”
India is home to more than 5 million software programmers, who are most under threat from the impacts of advanced AI tools like ChatGPT, according to a report from Bloomberg.
Asia’s second-largest country is a prime location for companies that outsource back-office jobs and other roles overseas. Silicon Valley tech giants, Wall Street banks, airlines and retailers are all customers to India’s outsourcing firms.
Tata Consultancy Services (TCS), an Indian multinational IT services and consulting firm, is the country’s largest outsourcing provider. Others include Infosys and Wipro.
TCS has bet big on generative AI, committing to train more than 25,000 engineers on the technology over Microsoft’s Azure Open AI service to “help clients accelerate their adoption of this powerful new technology.”
In an interview with CNBC Thursday, TCS’s CEO N. Ganapathy Subramaniam said that the company began taking a “machine-first” approach to project delivery about four years ago and it showed how AI will make an “enormous impact on the way that we operate and the way that we do things.”
Generative AI, Subramaniam said, “has just advanced it by a few years.”
Mostaque reiterated a previous statement he made saying that there will be “no more programmers” in five years’ time — however, he caveated this to say that he meant coders in the traditional sense.
“Why would you have to write code where the computer can write code better? When you deconstruct the programming thing from bug testing to unit testing to ideation, an AI can do that, just better,” Mostaque said.
“But it won’t be doing it automatically, it will be AI ‘co-pilots,'” Mostaque said. “That means less people are needed for classical programming, but then are they needed for other things? This is the question and this is the balance that we have to understand, because different areas are also affected differently.”
WATCH: A.I. will make an ‘enormous impact’ on the way we operate: Tata Consultancy Services
The X logo appears on a phone, and the xAI logo is displayed on a laptop in Krakow, Poland, on April 1, 2025. (Photo by Klaudia Radecka/NurPhoto via Getty Images)
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Elon Musk‘s xAI Holdings is in discussions with investors to raise about $20 billion, Bloomberg News reported Friday, citing people familiar with the matter.
The funding would value the company at over $120 billion, according to the report.
Musk was looking to assign “proper value” to xAI, sources told CNBC’s David Faber earlier this month. The remarks were made during a call with xAI investors, sources familiar with the matter told Faber. The Tesla CEO at that time didn’t explicitly mention any upcoming funding round, but the sources suggested xAI was preparing for a substantial capital raise in the near future.
The funding amount could be more than $20 billion as the exact figure had not been decided, the Bloomberg report added.
Artificial intelligence startup xAI didn’t immediately respond to a CNBC request for comment outside of U.S. business hours.
The AI firm last month acquired X in an all-stock deal that valued xAI at $80 billion and the social media platform at $33 billion.
“xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent,” Musk said on X, announcing the deal. “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”
Read the full Bloomberg story here.
— CNBC’s Samantha Subin contributed to this report.
Alphabet CEO Sundar Pichai during the Google I/O developers conference in Mountain View, California, on May 10, 2023.
David Paul Morris | Bloomberg | Getty Images
Alphabet‘s stock gained 3% Friday after signaling strong growth in its search and advertising businesses amid a competitive artificial intelligence environment and uncertain macro backdrop.
“GOOGL‘s pace of GenAI product roll-out is accelerating with multiple encouraging signals,” wrote Morgan Stanley‘s Brian Nowak. “Macro uncertainty still exists but we remain [overweight] given GOOGL’s still strong relative position and improving pace of GenAI enabled product roll-out.”
The search giant posted earnings of $2.81 per share on $90.23 billion in revenues. That topped the $89.12 billion in sales and $2.01 in EPS expected by LSEG analysts. Revenues grew 12% year-over-year and ahead of the 10% anticipated by Wall Street.
Net income rose 46% to $34.54 billion, or $2.81 per share. That’s up from $23.66 billion, or $1.89 per share, in the year-ago period. Alphabet said the figure included $8 billion in unrealized gains on its nonmarketable equity securities connected to its investment in a private company.
Adjusted earnings, excluding that gain, were $2.27 per share, according to LSEG, and topped analyst expectations.
Alphabet shares have pulled back about 16% this year as it battles volatility spurred by mounting trade war fears and worries that President Donald Trump‘s tariffs could crush the global economy. That would make it more difficult for Alphabet to potentially acquire infrastructure for data centers powering AI models as it faces off against competitors such as OpenAI and Anthropic to develop largely language models.
During Thursday’s call with investors, Alphabet suggested that it’s too soon to tally the total impact of tariffs. However, Google’s business chief Philipp Schindler said that ending the de minimis trade exemption in May, which created a loophole benefitting many Chinese e-commerce retailers, could create a “slight headwind” for the company’s ads business, specifically in the Asia-Pacific region. The loophole allows shipments under $800 to come into the U.S. duty-free.
Despite this backdrop, Alphabet showed steady growth in its advertising and search business, reporting $66.89 billion in revenues for its advertising unit. That reflected 8.5% growth from the year-ago period. The company reported $8.93 billion in advertising revenue for its YouTube business, shy of an $8.97 billion estimate from StreetAccount.
Alphabet’s “Search and other” unit rose 9.8% to $50.7 billion, up from $46.16 billion last year. The company said that its AI Overviews tool used in its Google search results page has accumulated 1.5 billion monthly users from a billion in October.
Bank of America analyst Justin Post said that Wall Street is underestimating the upside potential and “monetization ramp” from this tool and cloud demand fueled by AI.
“The strong 1Q search performance, along with constructive comments on Gemini [large language model] performance and [AI Overviews] adoption could help alleviate some investor concerns on AI competition,” Post wrote in a note.
WATCH: Gemini delivering well for Google, says Check Capital’s Chris Ballard
CNBC’s Jennifer Elias contributed to this report.
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