A research note warning that the AI boom could trigger a recession and a stock market crash spooked investors and sent software stocks sliding on Monday.
Citrini Research outlined a hypothetical 2028 scenario in which rapid AI adoption leads to mass white-collar layoffs and a collapse in consumer spending.
The report, which was published Sunday, went viral and amplified debate over whether AI is a productivity boom or a destabilizing shock.
Here’s what prominent economists and business leaders are saying about the note:
Claudia Sahm
Claudia Sahm, the chief economist of New Century Advisors and creator of the Sahm Rule recession indicator, raised concerns about the framing of the scenario.
“One concern with the Citrini scenario (and mirrored in the current moment) is the focus on destructive (left) rather than constructive (right),” Sahm wrote on X on Monday. “Maybe the latter takes longer, but it matters for the new equilibrium, too.”
In a follow-up post, she said that a labor market shock of the magnitude Citrini describes would likely trigger a forceful policy response.
“The labor market crisis they describe would generate a forceful fiscal/monetary response. They downplay that,” Sahm wrote. “The more likely scenario of gradual, limited job losses will be the hard one to get policymakers to focus and act.”
Michael Burry
Michael Burry, the investor famous for predicting the 2008 housing crash and profiled in “The Big Short,” amplified the report to his millions of followers.
“And you think I’m bearish,” Burry wrote on X, linking directly to Citrini’s research.
His post included a chart from the Citrini report, titled “The AI Feedback Loop: A Non-Cyclical Disruption,” contrasting traditional recessions — which, it said, self-correct — with what Citrini describes as an AI-driven cycle with “no natural brake.”
Brendan Duke
Brendan Duke, a senior director for federal budget policy at the Center on Budget and Policy Priorities and a former senior policy advisor at the Biden-Harris White House National Economic Council, said many critics may be misreading Citrini’s premise.
“A lot of people have a hard time with the concept of a thought experiment,” he wrote on X.
However, Duke added that one underappreciated risk in the scenario is the financial market impact if “prime white collar borrowers who nobody ever thought would default… defaulting” becomes a reality — referring to the report’s suggestion that white-collar layoffs could cascade into prime mortgage and private credit stress.
Jeff Dorman
Jeff Dorman, chief investment officer at Arca, framed the response to the report as a lesson in investor psychology.
“The biggest takeaway from the virality of this Citrini doom porn is that fear sells,” Dorman wrote on X, referring to Monday’s stock market sell-off.
He said that markets and media often reward dramatic crash predictions, even if they rarely materialize.
“There are thousands of successful macro newsletters that you pay money to subscribe to, and all of them tell you to buy gold, build a bunker, and short stocks,” he wrote, adding that high-profile recession forecasters frequently get attention despite repeated false alarms.
Deepak Shenoy
Deepak Shenoy, founder of Capitalmind, compared the AI recession warning to past resource-scarcity warnings.
“This is the viral post that currently spooks everyone,” Shenoy wrote in an X post.
He pointed to 2008-era warnings that oil reserves were running out — fears that did not ultimately dismantle the energy industry.
“Doomsday porn is addictive,” Shenoy wrote. “AI based end of everything is the WWF of the world now, fun to watch but is mostly fake.”
Michael Bloch
Michael Bloch, a partner at VC firm Quiet Capital, published a rebuttal titled “The 2028 Global Intelligence Boom.”
He said that even if AI keeps improving rapidly, it doesn’t have to end in a crash — it could make the economy richer.
“What if our AI bullishness continues to be right… and what if that’s actually bullish?” he wrote on Substack this weekend.
Bloch said investors are confusing pain in parts of tech — like SaaS and middleman-style businesses — with a broader economic collapse, and that cheaper services could leave households and startups with more money to spend.
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