AI hype is overdone, job fears overblown: NR Narayana Murthy and Aditya Puri offer a reality check
Read Time:6 Minute, 27 Second
In a recent and rare joint interview, the Infosys founder and former HDFC Bank CEO weighed in on the the advancements around artificial intelligence and why there is too much negativism on job losses.
nfosys and Catamaran Ventures founder NR Narayana Murthy sat down with former HDFC Bank CEO and Carlyle Group Asia adviser Aditya Puri and Moneycontrol’s Chandra R Srikanth
- Entrepreneurs should focus on long-term profit and fairness
- AI job loss fears are overblown; adaptation is key
- Banking in India remains underpenetrated with growth potential
It’s rare to get two of India Inc’s most candid titans in the same room.
In a recent interview with Moneycontrol at IIM Bengaluru, Infosys and Catamaran Ventures founder NR Narayana Murthy sat down with former HDFC Bank CEO and Carlyle Group Asia adviser Aditya Puri.
Together, they unpacked the essential traits for building lasting enterprises, weighed in on rapid advancements in artificial intelligence, and explained why the fear of AI-driven job losses is overblown
Edited Excerpts:
There was a lot to unpack from your remarks on stage, particularly around the qualities entrepreneurs should have and the role a company’s board should play. Given that the past year has been an exciting one for new-age startups, with a wave of IPOs hitting the market, do you see going public as the ultimate milestone?
Aditya Puri: The opportunity is phenomenal. I think both Mr. Murthy and I said very clearly that you have to be clear on the basics. If you want to set up something, set it up for the long run. It means you must understand what your purpose is, what your culture is, what your product fit is, and focus on probability. You can’t just say top line. If you don’t have bottom line, it doesn’t work. And if you keep these basic values, then make sure you respect all the stakeholders, I don’t think you will have a problem.
And no adjusted EBITDA or EBITDA?
Aditya Puri: Who are you fooling? You either have unit profit If you have unit profit, you know how many units you need to sell and you will be profitable. So don’t play around with that. Unit profitability leads you to breakeven and profit. If you say EBITDA, adjusted EBITDA, you are fooling yourself. At the end, the purpose of business is to have profit, create employment, grow and be fair.
Mr. Murthy?
NR Narayana Murthy: Aditya has very eloquently explained what entrepreneurs should do. I only have one thing that is they should all accept deferred gratification. That is, in the short term, we will make huge sacrifices. We will control our costs. We will make the company profitable. And that will inevitably provide very big returns in the medium and long term. Unless our entrepreneurs appreciate it, they understand it, the investor confidence in them will not be very high.
Do you think that is pragmatic now? Because you hear about founder secondaries in the second stage of funding where they want liquidity. Companies are listing faster than ever before. And there is also an argument that unless you pay top dollar, you won’t attract good talent.
Aditya Puri: I think it’s totally pragmatic. He is not saying everybody has to be paid the same. What he is saying is, you will be paid along with your qualification and market value. He is just saying, whatever you do, do it fairly. If you must pay more because that’s what the market is demanding, that’s fine. But don’t gratify yourself and reap the rest of it. Be fair so that they will be with you. And then you can’t take all the benefits because you are not creating all.
How do you see the impact of AI? Because there is a lot of concern on whether this will wipe out white collar jobs in India. Especially in the IT services industry. It’s been a huge source of employment and wealth creation for engineers.
Aditya Puri: I think there is too much hype about AI and what it can do and how quickly it can do it. And correspondingly there is too much negativity in terms of how many jobs will be lost etc. Will some jobs be lost? Yes. Will new jobs be created? Yes. So, if you look at AI, it will have growth. But it doesn’t mean if you say 60% of the jobs will be replaced by AI, there will be 60% job losses. Nothing like that happens. So, when you look at AI, it has to come down from the hype of what it is today.
There will be some change, but I think this negativism on loss of jobs is way too far. Total replacement is not going to happen. You will have Agentic AI. But the human is not going anywhere. It will be a combination that will be delivered. And even this whole thing about AI, it’s not going to happen tomorrow. It’s going to take a decade or two.
NR Narayana Murthy: My own experiments with using generative AI for productivity have shown me that a smarter mind will get better quality and better level of productivity from using these assistive technologies. Therefore, there is no need for youngsters to get worried. All that they need to do is become masters of these technologies by using them in an assistive manner. And by quickly learning how to use these technologies for their own benefit, by smart and hard work, by quickly learning new ideas and by discipline. So, the world will not end for the smart and the hard working.
Do you see AI reshaping financial services as we’ve known it? Bajaj Finance recently spoke about how AI handles a majority of their customer queries. There is a lot of buzz around whether this will make lending more efficient, whether it will reach more people.
Aditya Puri: What you are looking at is, there are things that have been identified today. So, when you look at it for banking, it will change the way marketing is done. It will change credit. It will change fraud. It will change certain processes. But all this will happen slowly. Some is already happening.
A question on the broader banking sector as you see it today. I think one worry has been about deposit growth.
Aditya Puri: The fact of the matter is that banking is underpenetrated. A large portion of deposits remain in semi-urban and rural India, and with the small businesses which you can get. So, I don’t believe this business about deposit money moving to equity and mutual funds. Only 6% of India’s population invests in the stock market. So that cannot be, and it hasn’t gone out of the bank. The only money that’s gone out of the bank is the efficiency of the government, which had large balances – which has come out. Well, I don’t think there’s a shortage of money. I think we can work it out. And if there is, then maybe they will have to re-look at their reserve requirements in the priority sector, etc. But it’s an under-penetrated market looking for growth, and you have to look at new areas
Mr. Murthy, in your remarks, you described Mr. Puri as India’s finest entrepreneur post-independence. What makes him stand out?
NR Narayana Murthy: I think his resilience, his ability to stand up for his principles, his ability to resist so much of pressure in the Indian context to be flexible. I think that is what makes him the number one banker, number one entrepreneur.
Happy
0 %
Sad
0 %
Excited
0 %
Sleepy
0 %
Angry
0 %
Surprise
0 %
0
0
Average Rating