🤖 Will AI disrupt software jobs?

Good morning. A fun fact to kick start your week:

🧠 Octopuses have three hearts — two for their gills, one for their body — and their blood runs blue!
💙 Their main heart even stops beating when they swim, making crawling their preferred way to move.

The more you know 🤯 

Ruchirr Sharma & Shatakshi Sharmaa  

TABLE OF CONTENTS

• 🤖 Will AI disrupt software jobs

• 🔻 Moody’s downgrades U.S. credit rating

• 🗞️ Bite-sized summaries

  • ⏹️ IMF imposes restrictions

  • 🇧🇩 India restricts trade from Bangladesh

• 🧑‍🍳 What else is cookin’?

MARKETS

🇮🇳 India

• Indian stocks declined modestly as investors booked profits after the previous rally. Broader indices outperformed as midcap and smallcap stocks rose, while realty and media sectors led gains. Optimism persisted on hopes for improved global trade relations and softening crude oil prices.

🌍️ International

• US stocks extended gains for a fifth straight session. The rally was driven by easing US-China trade tensions and strong tech performance, despite weak consumer sentiment and rising inflation expectations. For the week, the S&P 500 gained 5.3%, the Nasdaq 7.2%, and the Dow 3.4%.

TECHNOLOGY

🤖 Will AI disrupt software jobs?

Zoho founder Sridhar Vembu has issued a stark warning about the future of software development jobs in the age of AI. In a post on X (formerly Twitter), Vembu pointed to the rapid rise of large language models (LLMs) and advanced tooling as a looming threat to the stability of software engineering roles.

"The productivity revolution I see coming to software development could destroy a lot of software jobs," he wrote, urging developers to brace for a fundamental shift. He cautioned against assuming that the high compensation traditionally enjoyed by software engineers is permanent, noting that such privilege is not a "birthright."

Vembu’s comments echo broader global anxieties around AI-led job disruption.

• The United Nations recently estimated that up to 40% of jobs globally could be impacted by AI.

• McKinsey & Company has projected that 400 to 800 million roles may be displaced within five years, with a significant share of the global workforce needing to transition to new careers.

India is no exception. According to Microsoft’s Work Trend Index 2023, nearly three-quarters of Indian workers fear AI could make their jobs obsolete. The Economic Survey 2024–25 also flagged the accelerating impact of AI on employment patterns.

Vembu’s message is both a wake-up call and a reality check. As companies increasingly adopt AI to enhance productivity, the traditional value of software development may face sharp redefinition. His remarks underscore a growing need for professionals—and policymakers—to rethink skillsets, expectations, and the future of work in an AI-driven world.

Read more: Economic Times

RATINGS

🔻 Moody’s downgrades U.S. credit rating

In a move that signals rising unease over America’s fiscal trajectory, credit rating agency Moody’s has downgraded the United States' sovereign credit rating from AAA to Aa1 — marking the country’s fall from its last top-tier rating among the "Big Three" agencies.

The decision reflects growing concerns over the U.S. government’s ballooning debt, persistent budget deficits, and the increasing cost of borrowing in a high-interest-rate environment. According to Moody’s, U.S. debt and interest payment levels have grown far higher than those of similarly rated countries. The agency cited a lack of political will to enact meaningful fiscal reforms as a core reason for the downgrade.

While the practical impact may be incremental — with investors demanding slightly higher yields to compensate for added risk — the symbolic weight is significant. Treasury yields edged up following the announcement, and ETFs tied to long-term bonds and U.S. equities slipped in after-hours trading.

Moody’s had long held out in keeping the U.S. at Aaa, even after Standard & Poor’s downgraded the country in 2011 and Fitch followed in 2023. Now, all three major agencies align in assigning the U.S. their second-highest rating.

At the heart of the downgrade lies a sobering fiscal picture.

• The U.S. is running a $1.05 trillion deficit so far this fiscal year — 13% higher than last year — driven by rising entitlement spending, costly interest payments, and relatively stagnant revenue growth.

• Moody’s projects that the federal deficit will swell to nearly 9% of GDP by 2035, with the national debt ballooning to 134% of GDP, up from 98% in 2024.

Overall: Analysts warn that diminished foreign appetite for U.S. Treasurys, combined with the sheer scale of refinancing needs, could challenge America's long-standing image as the world’s safest investment haven.

Read more: Economic Times

GENERAL OVERVIEW

🗞️ Bite-sized summaries

⏹️ IMF imposes restrictions - The IMF has imposed 11 new conditions on Pakistan for its bailout programme, raising the total to 50. These include parliamentary approval of a Rs 17.6 trillion budget, tax reforms in agriculture, energy tariff hikes, and governance measures. Pakistan must also lift import restrictions on used cars and phase out incentives for Special Technology Zones by 2035. The IMF warned that rising tensions with India could threaten fiscal and reform goals. The conflict recently escalated following India's Operation Sindoor, prompting Pakistan to increase its defence budget by 18% for the upcoming fiscal year amid ongoing economic instability.

🇧🇩 India restricts trade from Bangladesh - India has restricted $770 million worth of imports from Bangladesh, impacting 42% of bilateral trade, according to GTRI. Key items like garments can now only enter via select seaports, not land ports. The move responds to Bangladesh's rising trade barriers against Indian goods and growing ties with China under interim leader Muhammad Yunus. His recent comments and a $2.1 billion China deal heightened tensions. India aims to protect local manufacturing, especially in its northeast, which has suffered from limited market access. The garment sector is a key flashpoint, with India retaliating against Bangladesh’s curbs on Indian yarn exports. Dialogue remains open.

HEADLINES

🧑‍🍳 What else is cookin’?

What’s happening in India (and around the world 🌍️)

• Former VP Mike Pence calls the $400 million Qatari jet gift ‘a bad idea’ that Trump should turn down.

• China slaps anti-dumping duties on plastics from the U.S., EU, Japan, and Taiwan.

• In Ahmedabad, smartwatches are part of the solution to dealing with searing heat.

• Tata Motors plans more product actions this fiscal for 'mainstreaming' EVs.