We will have enough abundance, the need to work will go away. In a world where AI has already begun to infiltrate our daily lives, what will life look like by 2040? I sat down with Vinod Khosla, who many call one of the greatest venture capitalists of all time. Those who use AI will clearly beat those who don't use AI. He believed in AI long before it became part of the public discourse, and he's bet big and early on OpenAI, the leading AI research company that serves hundreds of millions of users a week.
I placed the largest bet I'd placed in 40 years by a factor of two.
Khosla predicts that within 15 years, AI will completely redefine life as we know it, driving down the cost of living, freeing young people from a future of work, and shifting society from survival to true fulfillment.
It's pretty unlikely a five-year-old today will be looking for a job.
But his utopian vision hinges on one critical safeguard: governments getting their policies right.
So the current MAGA notion of lower the taxes will not work.
I'm Allison Chantal, editor-in-chief of Fortune, and this is Titans and Disruptors of Industry. We'll be right back after this break.
This is on the topic of every CXO conversation I'm a part of, and I think the thought process has to be looking for high-impact areas that may not be necessarily the most glamorous or high-profile functional areas, but are ripe for automation and use of this technology to create efficiencies as well as innovation. And over time, AI agents will be also in customer-facing and growth-oriented domains. In our case, Deloitte, we're using it within our financial organization, looking at very mundane processes like expense management and working capital management. We're seeing other organizations using it in call centers and with software development that can be automated.
It comes down to intentionality. And so I think that intentionality in going functional area by functional area in concert with business and IT leadership and enterprise. It needs to be a mainstream business planning effort that's budgeted, that's KPIs are developed, and there's real accountability for actual business outcomes and impact because of agentic capabilities.
Vinod, it's a pleasure to be with you. You've had a storied career as both a founder and a venture assistant. As you like to say, you do not like to be called a venture capitalist, and you're certainly one of the titans of industry. So thank you for being with me today.
Oh, it's fun to talk about these things. Absolutely my favorite thing as well.
I love your future outlook. I think it's really a healthy dose of optimism that people need to hear when it comes to the AI future. Can you just give me a big picture perspective of what you think life could be like in 2040?
I would say, to imagine the change between today and 2040, you'd have to go back and look at the change between the 70s and now, when TV still had rotary dials and three channels, there was no such thing as a cell phone, no such thing as an internet. Life was very different. Expectations were very different. I think that magnitude of change is what will happen in the next 15 years. And what will we be doing? Are we going to be working? Are we going to be using public transportation? Are we all going to have private chauffeurs? What does kind of life look like? Here's the things to imagine. Almost all expertise globally will be free. It'll raise lots of interesting questions. Do you pay a farm worker the same as an oncologist, because they happen to have the same expertise, which is the expertise of AI. Almost all labor will be free because we will have robotics, probably for a few hundred dollars a month. The way you pay a few hundred dollars a month for a car, you'd pay for a robot in the house. It'll definitely make you any style of food you want, any recipe you can ask for, or might wish for, or might even be good at what you haven't had recently, and predict what you might like. For a change, that's one side of it. On the enterprise side, functions left for humans to do, very hard to predict. It's pretty unlikely a five-year-old today will be looking for a job. A five-year-old today will most likely not be looking for a job. So my daughter, oh, great, good. If I'm right, you will see a couple of phenomena. First, the need to work will go away. People will still work on the things they want to work on, not because they need to work. Look at the vast majority of jobs in this country, let alone the rest of the world. Which is worse, if you're an assembly line worker on a GM car line mounting a tire for eight hours a day for 30 or 40 years, if you're a farm worker here in the Salinas Valley, not far from here, hunched over in 100-degree heat, picking lettuce. Those are not jobs. Those are servitude. I think we will have enough abundance. The need to work will go away.
I think that sounds like a great future in terms of freeing us of servitude, jobs that are just jobs that you have to do because you need a living, as opposed to jobs that you really want to do like you. You're still working. You don't need to be but you love it, and I love my job, and it's a great place to be, but so many people don't feel that way. And I definitely want to dig into how you think that could be financially viable, and how we can support all these people who aren't working. But first I want to go back in time to your upbringing in India. I know you didn't come from a well-to-do family, the way that you learned about entrepreneurship. I think he's going out and physically renting magazines. I would hope that at some point you rented a Fortune Magazine. That would be awesome. I'd love to just hear how your upbringing shaped your perspective that you now use today.
A couple of things. First, I would say I grew up with very few expectations. I remember coming to this country in 1976. My family had never had a TV at home. My family had never had a phone at home. So expectations of what life was like was pretty low. You worked a lot and you survived, was the expectation. So I started in a very different world, but I also realized very quickly how much you have agency over your own future, how much you can create. And that was very energizing for me, like my future was in my hands, and I never really got a regular job. You know, I got my undergrad, my master's degree in Biomedical Engineering, and then my MBA at Stanford, and then did my first startup, did my second. I was fortunate. I've never actually worked for anybody or applied for a job or had a resume, as they used to call them, before LinkedIn. Everybody will have more opportunity to chart their own future. To tie it back, you know, today with your daughter, you would say to her, go to school, study hard, do well, get into a college. You hope she gets into a college, and then she can get a good job and support her family. In 15 years from now, you will say, what is bad advice today or used to be, which is, follow your passion. Follow your passion comes second to surviving. I think that surviving part will go away, and you'll tell every five-year-old kid, follow your passion. That would be awesome.
And so you clearly followed your passion all the way to the states, to Stanford, where you started Sun Microsystems, and then you went to Kleiner Perkins, and you helped kind of be the grandchild of Juniper Networks, which is one of the greatest returns in venture capital history.
That was fun. Yeah, I bet it was a 2500 return. I would like that.
That's amazing, pretty rare, even for venture capital. I'm wondering how being a little bit of a contrarian thinker, that's a signature trait of the most successful entrepreneurs and venture capitalists in the world. What learnings from Sun and Juniper success did you pick up to help hone that contrarian view?
Give yourself permission to think out of the box. You know, when I was in sustainability, I used to say, think outside the barrel, the oil barrel. Almost everybody has it. Very few people exercise it. And the most important trait in entrepreneurs, it's about agency and driving your future and being empowered. I had no resources. I had no contacts, I didn't have any money. It just, you create agency and you make it happen. It's still very hard. It's still the last 40 years, lots of failure points, lots of things that didn't work, but you power through those and have resilience. And I think 2040, almost everybody will have agency, because they won't have the constraints of abundance, if government policy allows it.
I do want to know your thoughts on that, because most jobs, clearly people do because they need money, and secondarily, it's a sense of purpose. You wake up in the morning, you have a responsibility. You go to do it. The loss of both of those things, income and purpose are huge, and I want to know your thoughts on how our brains can adapt to survive that kind of fast transition in both hugely important areas.
You may be out of luck. Your daughter won't be. I think younger people will adjust to this freedom to do what they want much easier than older people's notion of where they have meaning in life. Most people today don't have enough time to spend with their kids, totally. Most people today don't have enough time to spend with their aging parents. Talk about two large consumptions of time that is very, very meaningful. If you're an artist, you'd better get used to working at a restaurant as a waiter or waitress. That's the reality for most people aspiring to be an artist or a basketball star or a surfer or a musician. So I do think the room for creativity is very, very large, but we are drilled into a narrow vision of what we are supposed to do, and I think that's the fundamental thing that will change about humanity. AI will free us to be more human.
It's a message Vinod Khosla has had for decades. At the start of the millennium, he said, AI would redefine what it means to be human. By the mid-2010s, Khosla was investing in AI image and radiology technology. Then in 2019, his company, Khosla Ventures, was the first to make an institutional investment in the ChatGPT creator OpenAI. It was his largest single investment in 40 years. How do you think is the best way to replace the income when we have this huge wealth disparity? Let's talk about that.
Yeah, I think each country will do things differently, starting in about 2034, 80% of all jobs, so two-thirds of all jobs will be capable of being done by an AI. So whether you're a physician, whether you're a radiologist, whether you're an accountant, whether you're a chip designer, whether you're a salesperson, AI will do your job better. And there'll be an interim period where every professional will have four AI interns they're training to leverage themselves. And I think the initial model of AI deployment will be AI interns working for somebody who's already a senior accountant or a physician or pick your chip designer. But what happens when all labor is free? By the way, 15 trillion of US GDP is labor, 15 trillion that would mostly go away. That's a hugely deflationary economy, something nobody's planning on. But it's a different kind of deflation than past deflationary economies. The abundance of goods and services will be very, very large. Prices will be very low. So I would suspect by 2040, $30,000 will buy, and maybe $10,000 will buy much more than you can buy if you have $100,000 income today. So the level of income you need in a deflationary economy will be very different.
Interesting. So you think it'll cost less for just lifestyle.
Look, all education should be free. All, which means college is goodbye. It's a real question. It'll take longer, because people like institutions and the notion of institutions, but you won't need a college to get an engineering degree, you won't even need the engineering degree, except if your passion is learning, and my passion is learning, that's why I do what I do. So education free. Education can be free. All health care, health care, except interventional procedures like heart surgery, will be near free. Labor, whether you're talking about farm workers or assembly line workers or retail workers or accountants, that'll be all free and in a competitive economy, that means declining prices. Now I don't think GDP will, we will have dramatically increased GDP if it's measured right. GDP, as we measure it, will be a very poor measure of growth, because prices will be declining in this deflationary economy. So there's an unusual opportunity. Post-2040, most goods and services will be near free to produce. Energy will be free because of fusion and other sources of energy. It won't be oil-based and will be much cheaper. And there's complex areas that are hard to predict, like steel. I suspect we'll have 10 times more steel resources and much less need for steel. But things like housing are the hardest problem. But you have this world where we have abundance of goods and services you need, food and housing, health care, education, entertainment, almost all free.
Interesting. Do you see a world where, I think the internet made so many millionaires happen faster than at any point. And I think there's a feeling that AI will create more billionaires than at any point. Are we looking at this sort of like you're either a serf or a billionaire, and there's nothing in between. Is that? What does that look like?
You know, it's very hard to predict, and most of it, most of it will depend on government policy. So the current MAGA notion of lower the taxes will not work. My politics are clear. I think the level of minimum level of services governments will be able to provide will be much, much higher in all dimensions. How that redistribution happens, very hard to tell. Why are governments inefficient at certain things? Because they hire people who don't have the right incentive structure. So incentives is what capitalism is about. By the way, capitalism is by permission of democracy. You can't leave 80% of the population behind. They will revoke capitalism if that happens. I think we're seeing that. We are seeing pieces of that, but policy will see how we handle this set of services, this simple thing, short term, more structural things, long term. For example, in this traditional battle of now moving to economics, share of income to labor versus capital, it'll shift a lot to capital, little to labor. How do you change that in the short term? I think fundamentally we have to eliminate the notion of capital gains. All income is ordinary income. Everybody pays the same tax. And the next presidential campaign, I hope, gets behind nobody pays income tax below $100,000 a year starting 2030. That shortfall is made up by increase in the capital gains tax to be the same as ordinary income. I could go through lots of detailed policy. I'm working a document on that, but it makes it tax neutral, no more taxes, but much fairer distribution of income. 40% of all capital gains is paid by people making more than 10 million a year. Now that's a very small percentage. 123 million people, or roughly that, make less than $100,000 a year, and you make all taxes go away for them. So there's ways, and that's why I think policy, which will be driven by politics, will drive where we end up on this equation short term. And I think it will start in the early 2030s, this massive drive for structural change. People have proposed AI taxes, robot taxes, I think some sort of wealth fund for a nation. Norway has an Oil Fund. Alaska has an Oil Fund. We won't have oil but we will have other sources of wealth creation that should be. And these are some raw ideas. They have plenty of flaws in them, but they will be refined. And something structural has to happen. It could be universal basic income. It should be a wealth fund. It could be services that are near free. Any of these things. So very, I don't want to go too far into areas that are still in process in my thinking.
No, I think it's the right innovative thinking and approach. And I think a lot of people who are making under $100,000 would really support a lot of that.
