What is the story about?
A hypothetical report cautioning about the possible disruption caused by artificial intelligence (AI) has spooked investors. A research firm believes that the technology will negatively impact white-collar jobs and the economy.
As Citrini Research’s paper spread online, global shares tumbled for a second day on Tuesday (February 24). Indian software services stocks also suffered in the wake of the report. The NSE Nifty IT Index reportedly dropped as much as 3.6 per cent.
But what does the report say? We explore.
Citrini Research, a small research firm, was founded in 2023 by James van Geelen.
The firm has since been publishing macro and thematic stock research. The topics span from modern warfare to humanoid robots to GLP-1 drugs and broader macro trends.
The latest viral report titled The 2028 Global Intelligence Crisis: A Thought Exercise in Financial History, from the Future was co-authored by Alap Shah, chief investment officer at Lotus Technology Management.
The Citrini Research report explores the long-term impact of the AI boom, presenting a hypothetical scenario in which the technology continues to make advancements but ultimately spells trouble for the broader economy.
The paper published on Substack on Sunday imagined a 2028 in which AI expansion has resulted in a decline in white-collar employment and ultimately a stock market crash.
The scenario raises the question: "What if our AI bullishness continues to be right...and what if that's actually bearish?"
As per the analysis, the AI explosion will continue to trigger white-collar layoffs in the United States, significantly impacting consumer spending and reducing economic growth.
"This would have been manageable if the disruption remained contained to software, but it didn't," Citrini said in the report, as per Business Insider. "By the end of 2027, it threatened every business model predicated on intermediation. Swaths of companies built on monetising friction for humans disintegrated."
Speaking to Bloomberg TV, Shah, co-author of the report, spoke of a scenario where five per cent of white-collar workers could lose jobs within 18 months.“We generally have a set of shorts out against businesses that we think are going to be disrupted by AI,” he said Tuesday in Asia. “On the other side of that, we own a lot of semiconductors that we think are going to benefit.”
The paper laid out a scenario wherein white-collar workers in expensive metro areas are unable to afford homes, which leads to a ripple effect in the mortgage market.
As per Citrini's report, all these factors contribute to a stock market crash, with the S&P 500 tumbling by 38 per cent from its October 2026 peak.
It is imagined that the displacement of white-collar workers creates a negative feedback loop where firms slash jobs to ma increase margins, reinvest savings in AI, which enables more cuts.
"The system turned out to be one long daisy chain of correlated bets on white-collar productivity growth," the note said. "The November 2027 crash only served to accelerate all of the negative feedback loops already in place."
Citrini's report does not bring good news for India’s tech sector. It warned that in 2028 “the services surplus that had anchored India’s external accounts evaporated.”
The paper thought of a scenario where Indian developers remain affordable, but the marginal cost of an AI coding agent has dropped to "essentially the cost of electricity,” as per CNBC-TV18 .
“The entire model (of India’s IT services sector) was built on one value proposition: Indian developers cost a fraction of their American counterparts. But the marginal cost of an AI coding agent had collapsed to, essentially, the cost of electricity,” the report said, adding “The engine that caused the disruption got better every quarter, which meant the disruption accelerated every quarter.”
As AI agents learn autonomous coding and project management, Western clients are starting to bypass external vendors. The report imagined a scenario in which contract cancellations ramp up through 2027, vanishing a service surplus.
As AI coding agents become cheaper for companies, the firm warned that "TCS, Infosys and Wipro saw contract cancellations accelerate through 2027."
According to the Citrini hypothesis, the Indian rupee could fall by as much as 18 per cent against the US dollar in just four months as the services surplus evaporates.
By the first quarter of 2028, India may hold "preliminary discussions" with the International Monetary Fund (IMF) to stabilise the economy, the report imagined.
ALSO READ: From healthcare to road safety: How India is introducing AI into everyday living
As Citrini’s report went viral, it again stoked fears about the upheaval to the economy from AI.
Global shares tumbled on Tuesday, following the fall a day before, due to a number of factors, including the hypothetical paper and uncertainty over US President Donald Trump's tariff policy.
While many market watchers and tech industry executives have rejected the report as unrealistic and cynical, it caught the attention of investors.
The Citrini report sparked a global selloff in software stocks, with a related exchange-traded fund falling 4.8 per cent.
In India, Infosys stocks fell to their lowest level since June 2023. TCS and Wipro each dropped more than three per cent, reported Bloomberg.
On Monday, the S&P 500 dropped 1.0 per cent, while the Nasdaq Composite slid 1.1 per cent. DoorDash, which was mentioned in the report, dropped 6.9 per cent, while Uber Technologies, also mentioned, plunged 4.1 per cent.
The report thought that American Express would lose customers and witness card-swipe volumes decline due to white-collar layoffs. The stock fell 7.9 per cent on Monday.
Citrini has presented its scenario as a warning, indicating that investors should take action now. It signals that they should not be lulled into a sense of security by the strength of the AI trade.
"As investors, we still have time to assess how much of our portfolios are built upon assumptions that won't survive the decade," it concluded. "As a society, we still have time to be proactive."
Shah told Bloomberg TV that there should be an AI tax to shield from job losses. He recommended that governments should consider taxing incremental or windfall gains from AI.
With inputs from agencies
As Citrini Research’s paper spread online, global shares tumbled for a second day on Tuesday (February 24). Indian software services stocks also suffered in the wake of the report. The NSE Nifty IT Index reportedly dropped as much as 3.6 per cent.
But what does the report say? We explore.
What is Citrini Research?
Citrini Research, a small research firm, was founded in 2023 by James van Geelen.
The firm has since been publishing macro and thematic stock research. The topics span from modern warfare to humanoid robots to GLP-1 drugs and broader macro trends.
The latest viral report titled The 2028 Global Intelligence Crisis: A Thought Exercise in Financial History, from the Future was co-authored by Alap Shah, chief investment officer at Lotus Technology Management.
Citrini Research’s AI report
The Citrini Research report explores the long-term impact of the AI boom, presenting a hypothetical scenario in which the technology continues to make advancements but ultimately spells trouble for the broader economy.
The paper published on Substack on Sunday imagined a 2028 in which AI expansion has resulted in a decline in white-collar employment and ultimately a stock market crash.
The scenario raises the question: "What if our AI bullishness continues to be right...and what if that's actually bearish?"
As per the analysis, the AI explosion will continue to trigger white-collar layoffs in the United States, significantly impacting consumer spending and reducing economic growth.
"This would have been manageable if the disruption remained contained to software, but it didn't," Citrini said in the report, as per Business Insider. "By the end of 2027, it threatened every business model predicated on intermediation. Swaths of companies built on monetising friction for humans disintegrated."
Speaking to Bloomberg TV, Shah, co-author of the report, spoke of a scenario where five per cent of white-collar workers could lose jobs within 18 months.“We generally have a set of shorts out against businesses that we think are going to be disrupted by AI,” he said Tuesday in Asia. “On the other side of that, we own a lot of semiconductors that we think are going to benefit.”
The paper laid out a scenario wherein white-collar workers in expensive metro areas are unable to afford homes, which leads to a ripple effect in the mortgage market.
As per Citrini's report, all these factors contribute to a stock market crash, with the S&P 500 tumbling by 38 per cent from its October 2026 peak.
It is imagined that the displacement of white-collar workers creates a negative feedback loop where firms slash jobs to ma increase margins, reinvest savings in AI, which enables more cuts.
"The system turned out to be one long daisy chain of correlated bets on white-collar productivity growth," the note said. "The November 2027 crash only served to accelerate all of the negative feedback loops already in place."
What Citrini says about India
Citrini's report does not bring good news for India’s tech sector. It warned that in 2028 “the services surplus that had anchored India’s external accounts evaporated.”
The paper thought of a scenario where Indian developers remain affordable, but the marginal cost of an AI coding agent has dropped to "essentially the cost of electricity,” as per CNBC-TV18 .
“The entire model (of India’s IT services sector) was built on one value proposition: Indian developers cost a fraction of their American counterparts. But the marginal cost of an AI coding agent had collapsed to, essentially, the cost of electricity,” the report said, adding “The engine that caused the disruption got better every quarter, which meant the disruption accelerated every quarter.”
As AI agents learn autonomous coding and project management, Western clients are starting to bypass external vendors. The report imagined a scenario in which contract cancellations ramp up through 2027, vanishing a service surplus.
AI boom could negatively impact Indian tech services companies. Representational Image/shutterstock
As AI coding agents become cheaper for companies, the firm warned that "TCS, Infosys and Wipro saw contract cancellations accelerate through 2027."
According to the Citrini hypothesis, the Indian rupee could fall by as much as 18 per cent against the US dollar in just four months as the services surplus evaporates.
By the first quarter of 2028, India may hold "preliminary discussions" with the International Monetary Fund (IMF) to stabilise the economy, the report imagined.
ALSO READ: From healthcare to road safety: How India is introducing AI into everyday living
Impact of Citrini’s report
As Citrini’s report went viral, it again stoked fears about the upheaval to the economy from AI.
Global shares tumbled on Tuesday, following the fall a day before, due to a number of factors, including the hypothetical paper and uncertainty over US President Donald Trump's tariff policy.
While many market watchers and tech industry executives have rejected the report as unrealistic and cynical, it caught the attention of investors.
The Citrini report sparked a global selloff in software stocks, with a related exchange-traded fund falling 4.8 per cent.
In India, Infosys stocks fell to their lowest level since June 2023. TCS and Wipro each dropped more than three per cent, reported Bloomberg.
On Monday, the S&P 500 dropped 1.0 per cent, while the Nasdaq Composite slid 1.1 per cent. DoorDash, which was mentioned in the report, dropped 6.9 per cent, while Uber Technologies, also mentioned, plunged 4.1 per cent.
The report thought that American Express would lose customers and witness card-swipe volumes decline due to white-collar layoffs. The stock fell 7.9 per cent on Monday.
Is there any solution?
Citrini has presented its scenario as a warning, indicating that investors should take action now. It signals that they should not be lulled into a sense of security by the strength of the AI trade.
"As investors, we still have time to assess how much of our portfolios are built upon assumptions that won't survive the decade," it concluded. "As a society, we still have time to be proactive."
Shah told Bloomberg TV that there should be an AI tax to shield from job losses. He recommended that governments should consider taxing incremental or windfall gains from AI.
With inputs from agencies
