TL;DR:
- Kailash Nadh, CTO of Zerodha, challenges the conventional role of a CTO by leading a small team of 30 coders.
- Zerodha’s deliberate software development approach allows Nadh time for open-source projects and contemplation on broader technology implications.
- Nadh expresses concerns about AI’s potential to impact lower-end technology jobs while recognizing the limitations of AI in handling sophisticated systems.
- Automation of software development could be more feasible in larger teams, potentially affecting job roles.
- Nadh speculates on the impact of AI on the IT industry, highlighting the socio-economic reasons behind high headcounts in major IT services companies.
- The middle class may face job losses and socio-economic disruptions due to AI’s influence on white-collar jobs.
- Nadh questions the efficacy of traditional concepts like equity in a society facing significant job displacement and social disorder.
- While concerns about superintelligent AI exist, the more immediate threat lies in the social disruption caused by job losses.
- Nadh believes that a significant portion of work at Zerodha could be automated, but certain tasks requiring human judgment and interaction remain indispensable.
Main AI News:
In the world of technology, the role of a Chief Technology Officer (CTO) at a unicorn company is often associated with overseeing a massive team of software engineers. However, Kailash Nadh, the CTO of Zerodha, breaks this stereotype. Unlike his counterparts at major companies, Nadh leads a team of just 30 coders, a number that has remained unchanged for the past few years.
Zerodha, a stock trading platform, distinguishes itself by prioritizing meticulous software development and testing before launching new products and features. This deliberate approach gives Nadh the luxury of time to engage in open-source software projects and ponder the broader implications of technology. Nithin Kamath, the founder of Zerodha, considers Nadh his “guru,” and during hiring interviews, Nadh engages candidates in personal and philosophical discussions, resulting in only a select few making the cut in the past four years.
Recently, Kamath shared an internal note from Nadh, highlighting the potential threat of artificial intelligence (AI) to jobs. While Nadh acknowledges that AI alone won’t pose an immediate danger, he raises concerns about how current capitalistic and economic systems might adopt AI, exacerbating inequality and diminishing human agency.
In response to these concerns, Zerodha, a bootstrapped fintech company, has proposed an AI policy that pledges not to lay off employees solely due to technological redundancy. Subsequently, Moneycontrol had the opportunity to interview Nadh, who completed his PhD in AI over a decade ago, to gain insights into his views on AI’s societal impact, its enigmatic nature, and the accompanying philosophical conundrums.
In this first part of the interview, Nadh discusses the potential threat of AI to jobs and the resulting socio-economic implications. He delves into the varying degrees to which software engineering roles can be obsoleted by AI. While he believes that AI tools currently cannot significantly impact sophisticated systems, he points out that lower-end technology jobs, which constitute a substantial portion of the software work worldwide, could be significantly affected. Nadh himself has embraced AI tools like ChatGPT for debugging software, saving valuable time in the process.
When discussing the historical trends of software teams, Nadh notes that startups used to have lean teams without the need to hire hundreds of programmers. However, with the advent of venture capital investments, the size of teams became a growth metric, leading to a surge in hiring. Nevertheless, Nadh suggests that the increased productivity resulting from AI tools might reverse this trend.
In terms of Zerodha’s tech team, Nadh emphasizes that their small team size allows each member to handle a wide range of responsibilities, building expertise and ensuring the importance and quality of their work. However, he speculates that in larger teams, automating software development could be more feasible.
Regarding the potential impact on the broader IT industry, Nadh contends that the high headcount of major IT services companies is not primarily driven by technology but rather by the structure of their business. These companies hire numerous employees to meet billing requirements, even though the money rarely trickles down to the workers. Nadh suggests that the actual technical work carried out by individuals in lower ranks could easily be replaced by generative AI coding, especially when it involves maintaining and patching legacy systems.
As for the timeline of these changes, Nadh acknowledges the challenges posed by outdated technologies in large corporations. Although they often outsource such work to IT services companies in countries like India and the Philippines, he believes that automation will eventually exert economic pressure on these firms, leading to questions about the cost-effectiveness of human labor compared to AI systems.
While technological advancements have historically affected blue collar jobs first, Nadh highlights the unique situation with AI, where white collar jobs could face the initial threat. He refers to a report by Goldman Sachs, suggesting that around 300 million white collar jobs could be impacted in the near term, raising concerns about the ability of our current global economic framework to absorb the resulting job losses. Nadh reflects on the potential socio-economic consequences if the middle class loses jobs and recedes into poverty, expressing uncertainty about the future of social order in such a scenario.
Given the current landscape, Nadh cautions against relying solely on concepts like owning equity to mitigate the risks of widespread job displacement. He questions the relevance of equity in a society without social order or the rule of law, emphasizing the need for stability and large markets for such concepts to hold meaning.
When discussing the fear of superintelligent or sentient AI taking control of machines, Nadh asserts that the more plausible threat lies in the social disruption caused by job losses. While he acknowledges the potential for AI to impact a significant portion of work at Zerodha, he also recognizes that certain tasks, such as handling physical forms and making decisions based on their content, are more challenging to automate.
As Nadh contemplates the future, he foresees the possibility of automating 40-50 percent of the work at Zerodha with additional resources and time. However, he maintains that full automation is unlikely, as certain aspects, particularly those requiring human judgment and interaction, remain indispensable.
Conclusion:
Kailash Nadh’s insights highlight the potential impact of AI on jobs and society. As AI tools become more prevalent, there is a possibility of significant job displacement, particularly in lower-end technology roles and the white-collar sector. The challenges faced by the IT industry and the potential disruption to the middle class raise important socio-economic concerns. However, it is crucial to consider the limitations of AI and the essential role of human judgment and interaction. Businesses and markets should prepare for the evolving landscape by assessing the impact on workforce dynamics and exploring ways to balance automation with the need for stability and human expertise.
