Microsoft executive Rajesh Jha said AI could increase software profits even as companies reduce human staff. He explained that AI agents will act as users needing separate logins, workspaces and licenses. This could lead firms to buy more software seats than before, reshaping concerns that AI-driven layoffs would hurt software revenues.

Microsoft Executive Vice President Rajesh Jha has suggested that artificial intelligence will not diminish software companies' profits but could actually increase them, even if businesses significantly reduce their human workforce. In a recent conference, Jha presented the idea that AI agents deployed by companies may require their own identities, including logins, mailboxes, and separate workspaces within software systems.

Jha explained that even as businesses employ fewer human workers, AI agents will count as users too, meaning companies will still need plenty of software licenses, possibly even more than before. He described each AI agent as a potential job, envisioning a future where organisations will have more AI agents than humans, with each agent effectively becoming a separate user requiring a paid software license or seat.

The Microsoft executive illustrated this with a practical example. Today, a company with 20 employees buys 20 Microsoft 365 licenses, but if each employee gets five AI agents and the staff is reduced to 10 people, that could still mean 50 paid seats.

Challenging traditional pricing models