Published by Global Banking & Finance Review®
Posted on February 24, 2026
4 min readLast updated: April 2, 2026
Add as preferred source on GoogleA viral Citrini Research scenario warning of 2028 AI-driven layoffs and credit stress rattled markets, shifting money from software to chips. Some experts urge balance, with Nvidia’s earnings next as a key test.
By Tom Westbrook
SINGAPORE, Feb 24 (Reuters) - An imagined dystopia of mass unemployment fuelled by artificial intelligence, highlighted in Citrini Research's now viral report, has unsettled global markets, where a recent huge bet on the technology is starting to show cracks.
The report, the latest in a series of gloomy "think pieces" on the disruptive potential of AI, envisions a 2028 scenario where unemployment rises to 10.2%, triggered by layoffs as AI rapidly turfs out software and delivery applications.
This hypothetical downturn, compounded by mortgage and private-equity loan defaults, could send shockwaves through financial systems, sending U.S. stocks tanking, stalling credit markets and the broader economy.
The Citrini report has struck a chord with markets unnerved by AI's potential negative impact.
Investors have dumped the shares of software companies and those in sectors vulnerable to automation. The U.S. software shares index is down 24% so far this year .
"AI capabilities improved, companies needed fewer workers, white collar layoffs increased ... it was a negative feedback loop with no natural brake," Citrini report author Alap Shah wrote.
Similar big-picture concerns ran through blogs have circulated among investors this month - one by Matt Shumer, the CEO and co-founder of AI firm Otherside AI - about the scale of AI's disruptive power.
Shumer says the impact of AI could be "much bigger" than the 2020 COVID crisis that upended everything from global supply chains to the labour force and education.
Damien Boey, portfolio strategist at Wilson Asset Management in Sydney, noted that the market remains uneasy as it juggles cyclical signs of potential gains in risk assets against possible shock unreflected in conventional macro trends.
"The Citrini piece has struck a nerve in this regard," he added.
WINNERS AND LOSERS EMERGE
While global equity markets remain near record highs, this masks a massive rotation out of many AI-exposed companies into either defensive stocks or the profitable corners of the supply chain.
Since peaking last October, the S&P 500 software and services index is down more than 30% while Asia's chip-making giants have soared. TSMC is up 30% over the same period and shares in South Korea's Samsung Electronics and SK Hynix have doubled.
"AI is real...the divergence is real and the sell off in (software) makes sense as AI will force software coding to go to zero," said Christopher Forbes, head of Asia and Middle East at CMC Markets. "Those in the supply chain will win - chips, data centres, permanent energy."
The next test for markets comes with AI bellweather Nvidia's Wednesday earnings.
EXPERTS URGE MEASURED RESPONSE
Others stressed that as fear dominated, the positives of AI for the global economy were overlooked.
"I would take it seriously, not literally," said Nick Ferres, CIO at Vantage Point Asset Management, who said criticism of the Citrini report, for underplaying the economy's ability to adapt, was also valid.
In his piece, Shumer noted that the "single biggest advantage" workers could gain is to act early both in terms of understanding and adapting to AI.
In another piece dated Feb 17, the CEO of financial software and data firm ION Group, Andrea Pignataro, said markets should not panic over whether AI will replace software tools, but instead panic over what happens when institutions discover they have been teaching AI "to play without them."
"So far this year, the stock market has been discounting a scenario in which AI is our Frankenstein monster," said Ed Yardeni of Yardeni Research.
"We continue to believe that AI is augmenting workers' productivity rather than making them extinct."
(Reporting by Tom Westbrook; Additional reporting by Gregor Stuart Hunter in Taipei; Writing by Dhara Ranasinghe; Editing by Amanda Cooper and Andrei Khalip)
A viral AI doomsday scenario from Citrini Research spooked investors, pressuring software and automation‑exposed stocks while boosting chipmakers. The piece explores potential 2028 job losses, credit stress and wider market fallout.
Investors fear AI could commoditize software and services, hurting margins and demand. Conversely, the AI build‑out still requires chips, data centers and power, shifting flows toward semiconductor and infrastructure suppliers.
It’s a hypothetical stress case that highlights real risks but may understate adaptation and productivity gains. Strategists suggest taking it seriously—not literally—while watching earnings, labor trends and credit conditions.
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