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

“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.

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.

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