Sridhar Vembu’s latest warning about Zoho’s finances puts a difficult question before India’s technology industry: as artificial intelligence becomes central to the future of software, who will pay for the rising cost of building and running it?

On October 12, the Zoho co-founder said the company would not provide its usual annual pay increases this year. It has cut marketing expenditure, has not grown its employee count for 18 months and is trying to avoid mass layoffs. Vembu attributed the pressure to a fourfold increase in server prices for data centres, rising AI-related expenses and an uncertain geopolitical environment. He said the next three to five years would determine how Zoho’s reinvention works.

His account is specific to Zoho; it is not proof that the entire technology industry faces identical cost increases. But it brings a neglected side of the AI boom into view. The technology promises new products, faster development and fresh markets. It also demands computing infrastructure, engineering investment and money to keep services running.

For Indian startups, particularly those working in deep technology, the question is no longer just whether they can build something valuable. It is whether they can afford to take it from development to paying customers—and keep the business viable once they get there.

For software companies, AI is changing both the product and the economics behind it. More capable tools can help teams build software, but running AI applications can also increase demand for computing resources. Companies must decide how much to spend on infrastructure, how to price new products and how quickly customers will pay for the additional capabilities.

Source link