The artificial intelligence (AI) sector has enjoyed a prolonged period of growth, buoyed by substantial investments from companies seeking competitive advantages. However, a recent report from Citrini Research presents a contrarian view, suggesting that the continued expansion of AI might ultimately harm both investors and the average American worker. This speculative analysis, gaining traction on social media, has caused a stir among investors and contributed to a downturn in software stocks.
Citrini Research, which specializes in thematic equity investing, posits a scenario where the AI boom—far from being an unequivocal positive—culminates in negative repercussions for the economy as a whole. Presented as a retrospective view from the year 2028, the report raises a particularly provocative question: “What if our AI bullishness continues to be right…and what if that’s actually bearish?”
Many bearish perspectives on AI typically focus on infrastructure challenges or the uncertainties surrounding AI development. In stark contrast, Citrini’s outlook assumes that the growth of AI will persist, but in a manner that fails to facilitate meaningful economic transformation or generate the benefits touted by proponents such as Elon Musk.
According to Citrini, the relentless rise of AI technology leads to substantial job losses among white-collar workers, which significantly erodes their spending power and hampers overall economic growth. The report warns that while job disruptions may have initially been confined to the software sector, their effects soon ripple across the economy. By 2027, the reach of AI has begun to undermine various business models that rely on human intermediation, resulting in a widespread breakdown of companies that monetize human friction.
The ramifications are stark: as the housing market becomes affected by the financial instability of displaced white-collar workers, homeownership rates in costly metropolitan areas plummet, causing a corresponding destabilization of the mortgage market. This chain reaction ultimately triggers a stock market crash, leading to a frightening forecast in which the S&P 500 drops by 38% from its peak in October 2026.
Citrini’s analysis highlights a crucial distinction between the health of financial markets and the realities of the broader economy. While markets may thrive on productivity gains and rising profit margins—metrics often celebrated when companies announce job cuts—the overall economy requires robust consumer spending. This spending, in turn, relies on wage growth keeping pace with inflation. When these two factors diverge, even a thriving stock market driven by technological advancements cannot mask the detrimental impacts stemming from diminished consumer purchasing power.
In framing its analysis as a cautionary tale, Citrini emphasizes the urgency for investors to critically evaluate their portfolios. “As investors, we still have time to assess how much of our portfolios are built upon assumptions that won’t survive the decade,” the report concludes, suggesting that proactive measures are essential for both individuals and society at large to navigate the unfolding changes brought about by AI.
