This is f***ing insane!: AI’s dystopian future is K-shaped, and could decimate the middle classes from India to the US

Let me give you both the most pessimistic and optimistic views of where the middle classes of countries like the US and India will end up if AI adoption does not go beyond merely asking ChatGPT for answers, or Grok for funny images and videos. Companies at the forefront of artificial intelligence are warning about how jobs across industries could be wiped out by AI. This could potentially lead to a middle-class collapse in these countries if action does not match the situation. How bad can it get? And what is the way out?

A disturbing discussion led by AI leaders on the impending fall of jobs

The starting point for this article is a disturbing series of discussions on a future fall in jobs, ironically led by AI leaders themselves. Anthropic CEO Dario Amodei is ‘leading the charge’ in bluntly saying how traditional jobs, including ‘secure’ jobs in the legacy IT sector, are going to be wiped out. In recent interviews and public remarks, Amodei indicated that up to 50 per cent of entry-level work in fields such as law, consulting, and finance could be disrupted or replaced by AI systems within the next one to five years.

Reacting to this, Damian Player, CEO of the AI consulting firm Agent Integrator, recently posted on X: “This is f***ing insane! The CEO of Anthropic said what most C-suites only say behind closed doors… this is the head of one of the biggest AI companies alive telling ordinary people to wake up.”

A dystopian scenario if India does not adapt to AI beyond current levels

The situation being described below is only a simulation of the future, taking cues from the ongoing K-shaped growth in the US, underway since the Covid pandemic. K-shaped growth is when certain sections of society and the economy show exponential growth, while other sections race to the bottom, making the resultant image resemble the letter K. In a future scenario where AI eats up jobs, large sections of Indians could be pushed towards poverty. This could happen as early as the next five years in the absence of even foundational-level skills in AI.

What is the level of AI adoption in India? Identifying the problem

It is quite possible that a large majority of Indians have never actively used AI tools in a meaningful way. Even among the digitally savvy population, many have little knowledge of AI apart from using the free version of ChatGPT and the like. Contrast this with the current world, where agentic and ‘copilot’ systems such as Anthropic’s Claude integrations and automated workflow tools are slowly entering enterprise environments.

Only a small fraction of users subscribe to paid AI platforms that typically cost around ₹2,000 per month or more. An even smaller proportion use coding interfaces, APIs, or automated workflows to interact with AI systems.

An infographic showing the level of AI adoption in the world (Image Courtesy: LinkedIn/ Benjamin T, co-Founder at Aiso)

Why K-shaped growth in the US should be a wake-up call to India

The K-shaped growth pattern is already visible in the US economy. In the current scenario, this is partly a function of AI adoption too. Many Americans are forcing themselves to learn AI use cases in order to remain competitive in the workplace. In terms of AI adoption, analysts often describe four levels of participation, known as AI maturity models: Elite, Augmented, Middle, and Struggling. It is projected that around 30 per cent of American citizens could remain in the Elite and Augmented categories, while 50 per cent could fall into the Middle group, and about 20 per cent may Struggle to keep up.

Indians are ‘consumers’ of AI, and that is prelude to potential digital colonisation

There is a clear danger in Indians becoming consumers of international AI companies, essentially paying for subscription packages ranging anywhere from ₹2,000 or upwards to use their AI models. This is because India has yet to build globally competitive AI tools at scale, in spite of several initiatives at the government (India AI mission) and corporate (Infosys, TCS and others incoporating AI in workflows) levels. Even ‘localisation efforts’ are largely being driven by global technology companies such as Google, Microsoft, and OpenAI.

In several ways, this echoes patterns seen during colonial economic structures, when the British Raj turned large sections of the Indian population into consumers of value-added goods produced elsewhere.

If this trajectory continues, India could risk a form of neo-digital colonisation, where countries ahead of the AI curve — particularly the US and China — dominate the virtual and technological landscape.

Indians would, in effect, end up paying US or Chinese companies for AI services, revenue that could ultimately support these countries' domestic technology ecosystems and economic programmes.

A three-year price drop of Nifty IT stocks

Indian IT stocks crash, HNIs trickle out: A fever indicating worse possible outcomes in the near future

Not too far away in the future, full-stack AI companies could enter India aggressively, resulting in a dramatic rise in layoffs and a stock market correction led by the decline of traditional IT service firms. And in some ways, the warning signs are already visible when it comes to IT stocks.

The Nifty IT index has already shown significant volatility when viewed across recent multi-year patterns. At one point, it fell around 30–34 per cent from its peak within a span of several months (see image above).

For some observers, this evokes memories of the early stages of the 2007 downturn that eventually led to the global financial crisis triggered by the US mortgage market collapse.

A prolonged slowdown could potentially spill over into banking and other industries.

Layoffs, which have already been seen periodically in the global technology sector, could hit traditional IT jobs in India particularly hard.

A major downturn could also affect the Indian rupee, which has gradually weakened against the US dollar over the past decade.

Another indicator often cited in this context is the growing number of high-net-worth individuals (HNIs) exploring migration. According to various global wealth reports, several thousand millionaires are estimated to leave India annually, often relocating to countries such as the UK, United Arab Emirates, Singapore, Australia, and Canada.

So what is the way out? Adopt AI or die

Damian Player’s post that I mentioned earlier, also offers a possible cure for the problem. To paraphrase him, the good news is that the playbook has not changed.

There is still a pathway for AI adoption for those who are currently ‘AI-illiterate’. As Player said, pick an industry, learn the workflows. Become the ‘AI person’ these companies need.

As Player puts it, you do not need a degree. “You sure as hell don’t need to be a McKinsey consultant. You need Claude, a vertical, and the hunger to learn a business better than anyone else. God speed! I’ll be rooting for ya,” Player wrote.

Godspeed is all I can say to those standing at the edge of the AI cliff — and staring downwards.