The doomsday scenario
Attention to this topic intensified late last month following the release of a widely circulated note by a previously below-the-radar group called Citrini Research. Published on February 22, The 2028 Global Intelligence Crisis quickly went viral across Wall Street and Silicon Valley.
Written as a scenario analysis rather than a forecast, the piece imagines a near-term future in which increasingly capable AI systems begin replacing large numbers of white-collar workers. As layoffs spread, consumer spending weakens, prompting companies to adopt even more AI to cut costs.
The result, in the scenario, is a self-reinforcing economic loop: falling employment leads to weaker demand, which accelerates automation and pushes unemployment even higher.
The essay captured attention because it framed AI not as a productivity-enhancing technology wave, but rather as a potential macroeconomic shock—and one that our current system is not built to withstand.
Citrini’s creative writing exercise struck a chord, but it was not the first apocalyptic outlook on AI that has kept investors up at night.
Anthropic is the very rapidly growing private company that gave the world Claude—a leading AI model with surging revenues that are now closing in on $20 billion annually. Its founder and CEO, Dario Amodei, has been in the news lately for his skirmish with the Trump administration over the military’s access to Claude.
But Amodei has also been known for making bold forecasts about AI-driven job losses. Last May, he alarmed the investment community after predicting that AI could eliminate as much as half of all entry-level white collar jobs, driving unemployment rates to as high as 20% in five years.
Is it happening yet?
Ironically, it was economic researchers at Anthropic who just this week released a relatively reassuring report on AI’s impact on jobs. Labor Market Impacts of AI: A New Measure and Early Evidence is now gathering a lot of attention as well.
Despite widespread fears of job displacement, the report actually finds little evidence that AI has significantly affected unemployment so far.
Comparing unemployment trends across occupations since the launch of ChatGPT in late 2022, the researchers find that jobs that are “highly exposed” to AI disruption have not experienced meaningfully higher unemployment than less exposed ones.
There is, however, one subtle signal worth watching.
Hiring into highly exposed occupations—particularly among workers aged 22 to 25—appears to have slowed slightly in recent years. The study suggests the earliest labor market impact of AI may show up not as layoffs, but as fewer entry-level opportunities.
The Citrini report and the Anthropic study highlight the difference between AI’s theoretical effects and its current economic reality. The technology may eventually reshape large parts of the labor market, but for now the data suggests the transition is unfolding slowly.
But just because AI-related job displacement has not really happened yet, this does not mean it never will.
For the most part, we are in the early phase of AI where compute capacity is being built out and models are being trained.
Over the next several years, the economy will transition into widescale AI deployments. That is when the job displacement may truly kick into gear.
Basis for optimism
While we take these uncertainties seriously, we remain optimistic about the long-term impact of AI on the economy and markets. We continue to see AI as a technology that will drive productivity growth, which will in turn drive real economic growth and wealth creation.
AI is deflationary—in a good way. AI enhances the efficiency of businesses and thereby makes goods and services cheaper to produce.
Uncontrolled deflation caused by economic disruption and financial crisis (like the Great Depression) can lead to a dangerous downward spiral. This is the high-risk, deflation shock scenario Citrini describes.
But deflationary pressure, i.e, falling prices, is precisely what gives central banks the ability to print more money and inject more liquidity into the economy, boosting nominal growth.
Crucially, from an investor standpoint, a more dovish central bank means higher asset prices. Anticipation of this dynamic, as we discussed in late January, has potentially even contributed to rising gold prices (Gold Hits $5,000: This Is Scarcity, Not Risk Aversion).
To be fair, we are still very much in the early stages of the AI revolution. Vast uncertainties remain, and the more pessimistic scenarios need to be examined carefully.
Credible voices in the investment world, who are quite wary of the risks ahead, should not be dismissed.
A real life debate
To provide a window into how one of these voices is processing all these risks, we decided to share a text exchange we recently had with a prominent investor.
Trish and Rob have many valuable contacts across the financial world and regularly draw upon their insights.
What follows was a real-time exchange with this highly accomplished investor, who has responsibility for several billion dollars of assets. He prefers to remain anonymous, but we will use the alias David….
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