Nandan Nilekani: AI job risk lower in small firms

Nandan Nilekani, at the Global Fintech Fest 2026, suggested that AI could pose a greater job threat to large firms due to their structured nature, making it easier to automate tasks. He emphasized that structured companies can effectively apply AI to reduce jobs because of their organized activities.

Nilekani argued that an economy aiming to generate jobs cannot solely rely on a few large companies. Instead, it needs millions of small businesses. He stated, "In the world of AI, one of the big concerns is what happens to jobs, and it's a legitimate concern because large companies can actually apply AI effectively to reduce jobs because they are very structured in their activities."

He pointed out that while large companies might lose millions of jobs to AI, small businesses with just one or ten employees are less susceptible to such risks. "Those jobs are not AI. You can't use AI for them, and therefore those jobs in millions of small companies, are actually safer than a few million jobs in large companies," he explained.

Nilekani highlighted the importance of entrepreneurship, particularly for job creation. He noted that India's formal startup sector had grown from 10,000 startups in 2015 to 150,000 in 2025, and could potentially reach a million by 2035. He also acknowledged the role of the informal sector, suggesting that both new startups and traditional businesses would be key employers in the future.

According to Nilekani, empowering these businesses with technology is essential to make the economy AI-proof. "If we use all this technology, we'll empower them," he said. "Therefore, we have to think of an economy with billions of small businesses and make them AI proof."