Former RBI Governor Raghuram Rajan Says AI Job Apocalypse May Be Exaggerated; Adoption, Politics, & Market Forces Will Decide Impact

New Delhi: Fears that artificial intelligence could wipe out a large number of white-collar jobs in the next few years may be overstated, former Reserve Bank of India governor Raghuram Rajan has said.

In a recent commentary published by Project Syndicate, he added that the pace of technology adoption, market competition and government policies will determine how the disruption unfolds.

“New technologies usually take longer to spread across industries than many forecasts suggest,” Rajan added.

“Outside a few sectors such as software, various challenges and resistance to change often slow down the adoption of new technologies,” he mentioned.

To illustrate his point, Rajan referred to the example of automated telephone exchanges, which took decades to fully replace human operators.

He argued that similar delays could occur in the widespread use of AI across many industries.

Rajan later reiterated his views in a post on LinkedIn, where he said many AI predictions ignore the role of society and politics.

“Public opinion and political responses will also shape how AI affects jobs and the broader economy,” he mentioned.

In his analysis, Rajan outlined several possible paths for the AI-driven economy. One scenario could see a few powerful AI platforms developed by companies such as Anthropic and Meta Platforms gaining a strong technological edge.

“These companies could then charge high prices to businesses that rely on their AI systems,” Rajan explained.

“If that happens, companies across industries might use AI to automate many cognitive tasks and reduce white-collar staff,” he stated.

Workers who lose such jobs could move to service sectors like retail or hospitality, which may increase competition and push wages lower in those areas.

Rajan also described another possibility where multiple AI systems compete in the market.

“In such a scenario, productivity gains could spread more widely across the economy rather than being concentrated among a few companies,” he mentioned.

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