Since the rise of generative AI, one prediction has dominated headlines: artificial intelligence would replace software developers, call center agents, accountants, and millions of other knowledge workers. Countries built on outsourcing—especially India and the Philippines—were expected to be among the biggest losers.
But a new analysis by economist Richard Baldwin suggests that reality is moving in a very different direction. In his LinkedIn article, “The Jobs AI Was Supposed to Eliminate Are Booming” Baldwin argues that if AI were truly wiping out outsourcing jobs, the impact should already be visible in international trade data. When a U.S. company hires an Indian IT firm or a Philippine BPO provider, those payments are recorded as service exports. If AI had replaced those services, exports should be declining. So far, they are not.
According to WTO commercial services statistics analyzed by Baldwin, India’s exports of “Other Business Services”—a category that includes IT services, business process outsourcing (BPO), consulting, accounting, engineering, and other professional services—grew from $121 billion in 2022 to $185 billion in 2025. Even more striking, growth accelerated after ChatGPT’s launch rather than slowing down.
The same trend can be seen across other major service-exporting economies. The United Kingdom, Germany, France, China, the United States, Singapore, Belgium, and the Philippines all continued expanding their exports during the first years of the generative AI era. Together, these economies exported approximately $1.3 trillion worth of professional and business services in 2025.
For Baldwin, this is difficult to reconcile with the popular narrative that AI is already dismantling the global outsourcing industry. That does not mean the concerns surrounding AI were unfounded. Earlier this year, India’s technology sector lost nearly $50 billion in market value as investors reacted to growing expectations that generative AI would dramatically reduce demand for IT services. Tata Consultancy Services (TCS) announced its largest-ever workforce reduction, while Oracle also cut thousands of jobs in India. Venture capitalist Vinod Khosla even predicted that traditional BPO and IT services could largely disappear within five years.
Yet Baldwin argues that financial markets and real economic activity often tell different stories. Investor sentiment may change overnight, but trade data reflects what companies are actually buying—and those numbers continue to point upward.
One explanation is that AI is currently acting as a productivity tool rather than a direct replacement for workers. If an accountant or software engineer in India becomes significantly more productive with AI, the cost of delivering those services falls. Instead of eliminating outsourcing, this can make offshore providers even more competitive, encouraging global companies to purchase more services rather than fewer.
Another factor is that lower prices often stimulate demand. As coding assistance, compliance work, customer support, translation, and document processing become cheaper through AI, companies can afford to purchase services that were previously too expensive. Rather than shrinking the market, AI may actually be expanding it.
Baldwin also notes that large organizations rarely transform overnight. While AI capabilities have advanced rapidly, corporations typically require years—not months—to redesign workflows, renegotiate contracts, and reorganize business operations. The fact that ChatGPT has been available for less than four years may simply be too short a period to observe its full economic impact.
At the same time, Baldwin cautions against interpreting rising export revenues as evidence that employment is also increasing. Companies like TCS have laid off thousands of workers while continuing to generate higher export revenues. That suggests productivity per employee is improving—even if total employment eventually comes under pressure.
Generative AI is undoubtedly reshaping the future of work, but the data does not yet support the claim that it is destroying the global outsourcing industry. Instead, the world’s largest exporters of IT and business services continue to grow, even after the arrival of ChatGPT.
For emerging digital economies like Uzbekistan, this offers an important perspective. AI may prove to be less of a replacement for service exports and more of a catalyst that enables local companies to deliver higher-value services, compete globally, and expand their presence in international markets. The bigger transformation may not be the disappearance of jobs, but the way those jobs are performed.
