A speculative thought experiment published Sunday by analysis firm Citrini Research triggered a sharp market selloff Monday, with IBM falling approximately 13% and software stocks declining broadly as investors reacted to a hypothetical scenario depicting severe AI-driven economic disruption by 2028.
The report, titled "The 2028 Global Intelligence Crisis," presents a fictional macro memo ostensibly written in June 2028 describing an economy where unemployment has reached 10.2% and the S&P 500 has fallen 38% from October 2026 highs due to mass white-collar job displacement from advancing AI capabilities.
The Hypothetical Scenario
The Citrini piece, co-authored by Alap Shah of investment firm LOTUS, imagines a negative feedback loop beginning with an "initial wave of layoffs" in early 2026. As AI capabilities improved, companies needed fewer workers, white-collar layoffs increased, displaced workers spent less, margin pressure pushed firms to invest more in AI, and AI capabilities improved further—creating a self-reinforcing displacement spiral.
The report introduces the concept of "Ghost GDP"—output that shows up in national accounts but never circulates through the real economy because the productivity gains accrue to capital rather than labor. In this scenario, nominal GDP continues growing and productivity reaches levels not seen since the 1950s, but household spending collapses as workers are cut out of the economic loop.
The authors describe commerce transitioning from discrete human decisions to continuous AI-driven optimization running 24/7, with the median US individual consuming 400,000 tokens per day by March 2027—10x higher than late 2026 levels. This shift eliminates entire categories of intermediary businesses whose value proposition depended on human limitations like limited time, patience, and information processing capacity.
Market Reaction and Real-World Impact
Despite being clearly labeled as speculative fiction and including explicit disclaimers that "you're not reading this in June 2028. You're reading it in February 2026," the report triggered real capital movements at real speed.
IBM's 13% decline Monday came partly in reaction to the report's discussion of how Anthropic's Claude Code tools could accelerate refactoring COBOL applications—positioning AI as a replacement for IBM's established modernization services. The company has been pitching similar AI-driven COBOL translation for years, but markets reacted to the fresh narrative reframing incumbent advantage as vulnerability.
Software and cybersecurity stocks also fell broadly as the report highlighted how AI could compress or eliminate entire business model categories built on information asymmetry, transaction friction, and human cognitive limitations.
The Wall Street Journal pointed to the viral report as a key accelerant of investor anxiety. Discussion of the piece accumulated roughly 16 million views on X (formerly Twitter), with notable investors including Michael Burry amplifying it with the comment: "And you think I'm bearish."
Why Fiction Moved Markets
The market reaction reveals something significant about the current investment climate: the gap between "plausible narrative" and "tradeable signal" has collapsed to nearly nothing. When a scenario feels real enough to model and underlying anxiety is already present, fiction and forecast become functionally indistinguishable to market participants making positioning decisions.
The Citrini authors were transparent about the exercise being hypothetical, but the scenario resonated because real disruption signals are already visible. Indian IT stocks lost approximately $50 billion in market capitalization in February on AI-disruption fears. Enterprise software companies face genuine pricing pressure as customers threaten to replace SaaS subscriptions with AI-generated custom solutions.
METR's recent task-completion estimates show Claude Opus 4.6 has roughly a fourteen-and-a-half-hour 50% time horizon, meaning it can succeed at tasks calibrated to that duration of human expert effort about half the time. For workers whose jobs consist of well-specified, software-adjacent tasks in the four-to-fifteen-hour range, the directional signal is unmistakable.
Buried beneath the alarming hypothetical scenario, the Citrini authors made clear their actual position: "We are certain some of these scenarios won't materialize. We're equally certain that machine intelligence will continue to accelerate."
The piece ends not with doom but with a call for proactive assessment: "As investors, we still have time to assess how much of our portfolios are built upon assumptions that won't survive the decade. As a society, we still have time to be proactive. The canary is still alive."
Critical Counterarguments
Critics of the Citrini scenario note it assumes institutions remain inert—that firms substitute labor with AI at speed, that displaced wages vanish into a black hole, that governments watch tax bases erode without adapting, and that no countervailing mechanisms emerge to recirculate gains.
Economists point to historical precedent showing that general-purpose technologies have implementation lags. Gains from electricity, computing, and the internet all took far longer to materialize than capability advances suggested, requiring complementary investments in processes, organizational redesign, and what economists call "intangibles."
The scenario also holds three variables fixed while letting AI capability run free, creating asymmetry that drives the dramatic conclusions but may not reflect how adaptive systems actually respond to technological disruption.
Regardless of whether the specific scenario materializes, the market's reaction confirms that AI displacement anxiety has moved from theoretical concern to active pricing consideration—and that even explicitly fictional scenarios can trigger real capital allocation decisions when they articulate widely-held fears.
