Today’s news gives us three different glimpses into ways that countries outside the U.S. and China are navigating a world of increasingly powerful AI. India’s IT industry is experiencing growing pains from automation, while Brazil and Europe scramble to catch up in AI research. There are lessons to be learned from all three.
India
AI is currently disrupting the $315 billion Indian IT industry, Reuters writes, creating winners and losers in a volatile market. Most of the changes actually sound good: rising productivity, clients demanding lower fees, and companies paying for outcomes rather than billable hours. I’ve done my fair share of filling out timesheets and hating it with every fiber of my being, and I think “how much did you accomplish” is a far better measure of success than “how much time was spent.”
The Reuters piece paraphrases Tech Mahindra CEO Mohit Joshi, saying “Some rivals are factoring in productivity gains of 70% to 80% over five to seven years” but dismissing competitors’ excitement as “irrational.” I notice that Tech Mahindra stock is not doing terribly well. It is not wise to underestimate AI; in the short term at least, I suspect the companies betting hardest on automation will win out.
The developments may be less rosy for young Indians who relied on the industry to put food on the table.
[TCS] is thus far the only Indian IT services provider to have announced mass layoffs in the AI era, implementing cuts of more than 12,000 last year. But companies have flagged that their traditional role as huge hirers of new recruits may be winding down.
The country’s IT giants will no longer need large ranks of entry-level engineers, according to former Infosys CFO V. Balakrishnan.
“The pyramid model is gone. With coding agents, we no longer need basic coding,” he said.
This observation mirrors that of the Stanford paper I covered earlier in August: AI’s job effects are modest so far, but they disproportionately affect the youth.
Brazil
Reuters reports that Brazil is jumping on the AI bandwagon, investing over $400 million in AI infrastructure and making plans to build a massive AI supercomputer. The interesting thing is that they seem to be splitting this investment between U.S. and Chinese companies.
I don’t expect this to change the AI race much; U.S. companies easily outspend Brazilian investments a thousand to one. But the proliferation of AI infrastructure does mean that it’s only going to get harder to enforce a global halt the longer the world delays.
Europe
Recently alarmed by their evident dependence on foreign AI, European countries have been scrambling to catch up to the U.S. and China with subsidized projects and datacenter expansions. Bloomberg briefly summarized the EU position in a newsletter today, pointing out that European AI funding still pales in comparison to the massive spending by U.S. firms.
Europe has been the butt of many jokes in AI circles for trying to have its AI cake and eat it too. EU regulations seem to have found the worst of both worlds: needlessly repressive of ordinary AI use, gravely misaimed when it comes to addressing the most serious threats.
But I wouldn’t count Europe out of the picture yet. I once ran a wargame involving several teams trying to navigate the creation of superhuman AI. The U.S. and Chinese teams spent the entire game gleefully sabotaging each other and racing as hard as they could, while the EU made virtually no progress in AI research. It looked like the game would end in global annihilation, until the EU team came in with a sober mutual-halt pact and convinced their rivals to sign it.
In real life, relatively neutral third parties can often inject a modicum of sanity into dangerous rivalries. During the Cold War, neutral and unaligned states often served as mediators and facilitators for negotiations. For instance, Finland famously hosted the signing of the Helsinki Final Act in 1975; signed by 35 nations, it fostered cooperation between rivals, formalized previously contested borders, and established common ground on human rights.
Europe has an opportunity to contribute technical research as well. UK AISI has produced excellent research into the behaviors and capabilities of frontier AI models on effectively a shoestring budget, in the process demonstrating considerably more security mindset than the AI labs themselves. If Europe can get its collective act together and fund verification research where the U.S. and China have thus far dropped the ball, they could perhaps provide much-needed mediation in the eleventh hour.
The analyses and opinions expressed on AI StopWatch reflect the views of the individual contributors and the sources they cover, and should not be taken as official positions of the Machine Intelligence Research Institute.