Hyperscalers’ Exponential Revenue Growth Signals Trouble for Jobs

So far AI has for the most part augmented the efforts of human workers rather than replacing them outright. Agentic AI is different – it promises to replace human workers entirely and perform roles independently. Actual use of Agentic AI has so far been limited by its unreliability and by the high cost of compute. The exponential surge in the hyperscalers’ revenues and the corresponding ramp-up in their investments in Agentic AI increases the odds of job losses. India is particularly vulnerable due to the well-defined nature of tech and Customer Experience jobs. Our Global funds and goal-based planning services can offer relief to Indians looking to benefit from the AI revolution.

Hyperscalers’ exponential capex rise is on account of development of AI capabilities

Hyperscalers – Alphabet, Anthropic,  Amazon, Microsoft, etc – have invested exponentially in capex to scale their AI capabilities. We know this because it gets reflected in AI providers’ exponential rise in revenues. Anthropic alone is now generating $30bn of revenues from selling AI to enterprises, up 30x in the space of 15 months! Since most of its revenues are through enterprise solution that Anthropic offers, this reflects the massive surge in capex of hyperscalers.

Source: Amazon, Meta, Alphabet, Microsoft as of 2026. Not intended as a recommendation to buy or sell any names referenced herein. Fund holdings will vary. Visit vaneck.com/smhx for most recent fund holdings data. Past performance is no guarantee of future results (sourced from VanEck’s podcast )

So far, most of the revenues earned by the hyperscalers has come from selling AI which augments human workers (as opposed to selling Agentic AI which can replace human workers). We know this because Anthropic itself publishes fairly comprehensive data on this subject – see the exhibit below.

• Employment for software developers ages 22 to 25 has fallen nearly 20% from its 2024 peak
• Employer surveys point to further change ahead, with one-third of respondents expecting workforce reductions over the coming year (see exhibit 4)
• Global data on layoffs show that they have picked up pace especially post the launch of Chat GPT (see exhibit 5 below)

In India, Tata Consultancy Services confirmed cutting 12,000 positions by FY26 in July 2025; actual FY26 workforce reduction was 23,460 employees per TCS disclosures.

For FY26, for the Indian IT Services sector as a whole, NASSCOM (the IT industry’s trade body says), revenue grew 6.1% while headcount grew only 2.3%. Productivity gains, partly driven by AI and automation, are constraining the headcount elasticity of revenue growth. NASSCOM explicitly framed FY26 as the sector’s third inflection point — moving “from FTE delivery to outcome-based, risk-sharing constructs.”

Secondly, the real threat to AI jobs is likely to come from Agentic AI i.e. AI that is capable of doing the role performed by a skilled human worker without any supervision. The simplest example of this is an autonomous car. Visitors to San Francisco who have taken taxi rides in autonomous cars will understand the potential for Agentic AI to gobble up millions of jobs across the world.

The rise of Agentic AI

We can see that the hyperscalers’ colossal investments in AI are bearing fruit as Amazon like players integrate it with their business model in such a way that augments their long standing competitive advantages even further, leaving any credible competitor miles behind as explained by Angus Shillington of VanEck, which runs SMH, world’s largest semiconductor ETF. We are likely to see both incremental capex by Amazon itself which keeps their AI-productivity-cost flywheel turning as well as other hyperscalers emulating and doing similar things in their own domains only rise hereon.

Agentic AI capability — measured as the human-time-equivalent length of tasks that frontier AI models can complete with 50% reliability — has been doubling approximately every seven months for the past six years, per METR’s peer-reviewed methodology. (2)

ServiceNow’s July 2025 India report projects 1.8 crore (18 million) jobs across manufacturing, retail, and education to be impacted by 2030, against 30 lakh (3 million) new technology jobs to be created.

Investment Implications

We have highlighted in our bestselling book, “Breakpoint: The Crisis of the Middle Class” that the Indian middle class is: a) more indebted today than it has ever been; b) among the most indebted groups of people anywhere in the world – see chart below; c) has seen white collar job growth evaporate in the past 3 year; and d) is seeing its real wages fall over the past decade. Against this backdrop, the rise of Agentic AI is likely to spell further trouble for the Indian middle class.

In this uncertain environment, we offer two services which could be useful.

Four years ago, we began investing our clients’ monies globally from GIFT City in Gujarat. We now have multiple tax-efficient and cost-effective US$ based Global funds based out of GIFT City. Amongst other things, these Global funds, including our Global Compounders PMS (see chart below), are invested in, both, the tech hardware and software supply-chains which underpin the AI revolution.

Secondly, Marcellus has a free goal planning and asset allocation service wherein anyone can reach out to us and get a detailed 4-page financial report free of charge.
We work with a three-step approach to help our clients diversify globally:

• Map your life goals to financial goals. How much do you need for near, medium, and long-term goals
• Allocate your investments across multiple uncorrelated asset classes. Avoid over concentration, illiquidity and disproportionate risk-reward. Get the allocation right based on your needs and your risk tolerance.
• Remain disciplined. Continue to save and channel savings to investments. Review and rebalance regularly.

Marcellus’s ‘MAP-Balanced’ which has delivered 8.34% returns since inception in Aug-24 to April-26 net of all fees and costs against 1.47% of Nifty 500 TSR (see the chart below).

Our colleagues at Marcellus offer our clients a free asset allocation plan. To avail of this, please visit plan.marcellus.in OR scan the QR code shown below into your mobile phone.