Traders were looking at red-tinted displays on Monday morning. As Salesforce and Oracle shares fell once again, coffee mugs hung in midair in downtown Manhattan. In just a few weeks, Workday had already lost almost half of its value. CrowdStrike followed closely behind. Even consumer-facing brands like DoorDash and Zillow were being pulled into the abyss. Earnings weren’t the bad guy. Interest rates weren’t the issue. Fear was the cause.
According to a Citrini Research research note, “agentic AI” would cause the economy to collapse by 2028. Software companies are failing. Delivery apps have been replaced. Automated mortgage underwriting has become irrelevant. The unemployment rate is 10%. The market falls forty percent. India’s export-services industry was destroyed. It read more like a script than a prognosis.
| Category | Details |
|---|---|
| Topic | AI Market Panic & Economic Impact |
| Key Voice | Senior White House Economist (Council of Economic Advisers) |
| Trigger Event | Citrini Research AI disruption scenario report |
| Market Reaction | 25–45% drops in select tech stocks (Salesforce, Oracle, Workday, CrowdStrike) |
| Broader Context | Public warnings from Nassim Taleb, Jamie Dimon, Dario Amodei |
| Estimated Scenario | 10% unemployment, 40% market decline (per report) |
| Reference | https://www.whitehouse.gov/cea |
A top White House economist rejected the story as “science fiction” by the weekend. The remark, which Bloomberg emphasized on X, was more of a mood adjustment than a response. Washington seems to be observing Wall Street turn into a theatrical production.
These days, artificial intelligence is the most popular market meme. AI is used like a magic word in conference rooms and earnings calls; it can be a sign of the end of the world or its salvation. Disruption is what startups promise. Public corporations claim to be immune. Investors experience both euphoria and fear.
After removing the political gloss, the economist’s point was straightforward: markets are attempting to price an essentially unknown future. They’re doing it poorly, too.
Not that AI is risk-free. Bankruptcies have been warned about by Nassim Taleb. Jamie Dimon has discussed the idea of redeploying workers who have been replaced by automation. Anthropic’s Dario Amodei has issued serious warnings regarding the effects on society.
However, in the past, people who are closest to disruptive technologies frequently grow extremely conscious of its risks. The main concern of nuclear physicists was atomic fallout. In 2020, epidemiologists witnessed the worst viral situations. Imagination is sharpened by being in the trenches.
Last week, as I passed the Treasury building with its marble façade shining in the winter sunshine, I couldn’t help but notice the disconnect. Policy personnel are simulating wage dynamics and productivity growth within. Markets outside are simulating a collapse.
According to Citrini’s report, the AI panic is predicated on almost seamless adoption, no regulatory hold-ups, and immediate business capitulation. It envisions governments being unable to react, labor markets being unable to adjust, and software companies being unable to change course.
It is feasible. Is it likely, though?
The annoyance of the White House economist seems to have historical roots. From railroads to electricity to the internet, every significant technical advancement sparked waves of anxiety and conjecture. Both existential dread and irrational excitement accompanied the online boom of the 1990s. Today’s AI feels the same. A metaphor for all nightmares and dreams.
Businesses affected by the sell-off, meanwhile, remain dynamic. Workday, Salesforce, and Oracle are incorporating AI rather than rejecting it. Automation experiments are being conducted by DoorDash and Zillow. Some people will make mistakes. Some might not succeed. That’s capitalism. However, it seems ambitious to project an industry-wide collapse in three years.
Naturally, markets are based on stories. And displacement is the prevailing story at the moment. Slow productivity gains across sectors are more difficult to stomach than headlines about “AI agents” displacing intellectual workers. Investors are beginning to fear that this time is different and that AI will not just replace labor, but also replace it.
However, such a shock has not been reflected in macroeconomic data. Employment is still strong. Despite its unevenness, productivity growth is not collapsing. AI-related businesses continue to attract venture capital, indicating a belief in growth rather than contraction. As I watch this happen, the volatility seems more like a collective fear than logical repricing.
That does not imply that it is wise to be complacent. There will be a challenge to certain company paradigms. It’s guaranteed by history. Profit margins may be stretched for software companies whose value is in repeated tasks. The arbitrage-based service industries may contract. However, revolutions are rarely linear.
The economist may have been direct or even contemptuous in his “science fiction” comment. Nevertheless, it conveys a more general reality: terror frequently overreacts to reality. Markets are insatiably curious. AI provides none. The void is filled by imagination, sometimes in a disastrous way.
Whether AI will alter the economy is not the more intriguing subject. It will. Pace is the true question. diffusion. Adjustment. Control. Human reaction. The variables are disorganized. challenging to model. It’s hard to tweet concisely. Clarity is preferred by Wall Street. Washington likes to be cautious. And the future is somewhere in the between of those two instincts.
For the time being, the sell-offs might reveal more about the psyche of investors than the future of technology. The reassurance from the economist won’t immediately reduce volatility. However, it does remind us of a market-unfashionable concept: perspective.
