Microsoft Executive Vice President Rajesh Jha has suggested that artificial intelligence will not diminish software companies' profits but could actually increase them, even if businesses significantly reduce their human workforce. In a recent conference, Jha presented the idea that AI agents deployed by companies may require their own identities, including logins, mailboxes, and separate workspaces within software systems.
Jha explained that even as businesses employ fewer human workers, AI agents will count as users too, meaning companies will still need plenty of software licenses, possibly even more than before. He described each AI agent as a potential job, envisioning a future where organisations will have more AI agents than humans, with each agent effectively becoming a separate user requiring a paid software license or seat.
The Microsoft executive illustrated this with a practical example. Today, a company with 20 employees buys 20 Microsoft 365 licenses, but if each employee gets five AI agents and the staff is reduced to 10 people, that could still mean 50 paid seats.
Challenging traditional pricing models
This perspective potentially reshapes software licensing and revenue models, addressing investor concerns that AI could disrupt traditional seat-based pricing as fewer human employees might lead to fewer licenses being purchased. Jha's argument suggests that the classic way of selling software through per-user charging should not be threatened by the rise of AI.
The broader AI impact on employment
The tech industry has already seen significant workforce reductions, with 78,557 workers laid off from January to April 2026, of which 37,638 cuts, or nearly 48 percent, have been attributed to reduced need for human workers because of AI and workflow automation.
Despite this trend, research firm Gartner has predicted that 50 percent of companies that attributed headcount reduction to AI will rehire staff to perform similar functions by 2027, suggesting that the AI transition may be more complex than initially anticipated.
Jha has spent more than 35 years at the company, oversaw Microsoft 365 and Windows during a critical period of AI transformation. In his departure message, he urged colleagues to keep the intensity of work on initiatives like Copilot, underscoring Microsoft's commitment to AI-driven products.
