An AI Thought Experiment on Substack Is Sending The Stock Market Spiraling
Summary
A thought experiment on Substack predicts a future where AI leads to significant unemployment and economic disruption, causing turmoil in the stock market.
Why It Matters
This article highlights the potential economic implications of AI advancements, reflecting investor sentiment and market reactions. Understanding these dynamics is crucial for stakeholders in finance and technology as they navigate the evolving landscape influenced by AI.
Key Takeaways
- AI could lead to mass white-collar unemployment, as predicted in a Substack thought experiment.
- Market reactions indicate fear of AI disrupting traditional business models, particularly in software and delivery sectors.
- Investors are increasingly concerned about the viability of established companies in the face of rapid AI advancements.
On Sunday, analysis firm Citrini Research published a thought experiment on Substack that reads like a piece of fiction. Titled “The 2028 Global Intelligence Crisis,” it’s a scenario set in June of that year in which unemployment has shot up to 10.2% in the U.S. due to mass AI-driven white-collar unemployment, which begins with an “initial wave of layoffs” in early 2026. GDP growth is still great, and productivity is booming in this hypothetical scenario, with AI agents creating a “ghost GDP,” aka “output that shows up in the national accounts but never circulates through the real economy.” In this dystopia, consumer spending has hugely declined as a negative feedback loop has been formed. “AI capabilities improved, companies needed fewer workers, white collar layoffs increased, displaced workers spent less, margin pressure pushed firms to invest more in AI, AI capabilities improved,” the essay forecasts. AI disrupts software, which leads to software-backed loan defaults. The pace of AI disruption is not contained to software in this scenario: AI agents, vibe coding, and autonomous driving come for the throne of delivery apps as dozens of vibe-coded DoorDash alternatives spring up overnight. Then, agentic commerce, coupled with stablecoins, gets rid of transaction fees and upends the business models of payment processors like Mastercard and card-focused banks like American Express. “What follows is a scenario, not a prediction,” the authors wrote. “Hopefully, reading this ...
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