Big tech sell off: Why this report on AI shook global markets

Citrini Research, a macro-thematic Substack research shop has published a scenario titled "The 2028 Global Intelligence Crisis." It outlines a future in which rapid adoption of autonomous AI agents sets off a chain of economic disruption, potentially leading to a deep recession and market crash by 2027–28.The report triggered a sharp sell-off in tech-related stocks. However, the authors stress that this is a scenario is not a prediction but designed to explore under-examined risks as AI scales by mid-2028.

How recession normally plays outTraditional cyclical recession

In a typical cycle, excess supply leads to slowdown, followed by rate cuts and eventual recovery.Why it could be different with AIAI-Driven economic feedback loopThe report argues that AI could create a very different downturn:

Feedback loop with no natural brake

The authors introduce the term "ghost GDP" to describe economic output that appears in headline GDP numbers driven by AI productivity and profits, but does not circulate in the wider economy because humans do not spend it.As the report states, "This is the first time in history the most productive asset in the economy has produced fewer, not more, jobs."As consumption collapses, the report warns that defaults could spread across private credit and mortgage markets.Three predictions for 2028The scenario outlines three major outcomes:

At the same time, the authors acknowledge creative destruction and note that AI has historically created new jobs even while eliminating others.

However, they argue that AI today absorbs labour faster and deeper than past technologies.Critics say it misses key factorsSeveral analysts argue that the scenario overlooks key economic realities.Macroeconomic implausibilityEvercore ISI's Krishna Guha calls the scenario "extreme and improbable", saying the conditions required to sustain massive low consumption among high-income workers are unlikely. He argues policy responses would intervene before any collapse.Creative destruction underestimatedHistorical patterns show that technology often destroys some jobs but creates others — sometimes in unexpected sectors. Critics say this adaptive process is not fully reflected in the report’s timeline.Policy and fiscal responses ignoredCentral banks and governments could deploy monetary or fiscal tools such as stimulus, retraining, and safety nets to soften shocks. Critics argue the report assumes no effective policy response, which they see as unrealistic.Job displacement oversimplifiedThe report treats widespread white-collar displacement as linear. Analysts counter that labour markets are dynamic, and workers often shift into new roles or sectors, especially when supported by policy measures.Credit market resilienceMarket experts note that private credit structures today are designed to absorb stress and are unlikely to trigger systemic bank runs like in 2008.AI capability lagMany investors and AI researchers believe autonomous AI agents currently fall short of the capabilities required to replace large parts of economic activity within the 2027 timeline, making the most severe projections questionable.A scenario, not a forecastCitrini Research maintains that the paper is not a prediction but an exploration of potential risks as AI scales rapidly. Whether the "AI-driven feedback loop" materialises or is offset by innovation, policy, and labour market adaptation remains at the centre of the debate.