OpenAI investor Vinod Khosla believes AI will cause economic deflation in the next 25 years

AI will cause deflation and abundance in 25 years, says OpenAI investor Vinod Khosla.

Khosla is a venture capitalist who was ranked 92nd on the Forbes 400 list in 2021. (Express image/Twitter)

Indian American businessman Vinod Khosla who has invested in OpenAI believes that AI will fundamentally change the global economy. The 68-year-old took to his X account to share his thoughts on the rapid rise of AI. Khosla while retweeting Erik Brynjofsson, the director at Stanford Digital Economy Lab, said that AI should be deflationary in the next 25 years.

Interestingly, Brynjofsson was responding to a tweet by OpenAI CEO Sam Altman on capitalists and the relationship between interest rates and new ideas.

“AI should be hugely deflationary over twenty five years. Capital should be scarce for a while, current measures of GDP and the economy will be less relevant but goods and services should be in great abundance. The key question is what are the right measures and the right questions,” Khosla wrote in his tweet.

AI should be hugely deflationary over twenty five years. Capital should be scarce for a while, current measures of GDP and the economy will be less relevant but goods and services should be in great abundance. The key question is what are the right measures and the right… https://t.co/NcPRWY3y04

— Vinod Khosla (@vkhosla) December 26, 2023

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Khosla’s viewpoint is in contrast to the conditions of the market and economy for the past two years. It needs to be noted that although inflation remains an issue, the rate of price increases has reduced from its highest levels in many years. During a deflationary environment, prices fall resulting in low profits for companies and dismal economic growth.

According to Khosla, capital should be limited for some time, and traditional indicators of GDP and economic health may become less pertinent. He added that there should be a plentiful supply of goods and services.

Khosla who is an alumnus of IIT Delhi, is a venture capitalist who was ranked 92nd on the Forbes 400 list in 2021. He is the founder of Khosla Ventures and the co-founder of Sun Microsystems. The entrepreneur has also stated in the past that machine learning will replace many jobs and increase income disparities but also generate enough GDP to offer basic income for everyone.

The venture capitalist reportedly invested $50 million in OpenAI in 2019, making him one of the biggest investors in the startup that created ChatGPT.