Could AI collapse the economy in 2 years? One research firm says yes.

Concerns about the impact of artificial intelligence (AI) on individual stocks and sectors have clearly been growing in recent months.

Just one recent example: On Monday, February 23, AI startup Anthropic PBC announced that its Claude Code tool could modernize the COBOL coding language, which is a major asset of International business machines (NYSE: IBM). That sent IBM shares down 13% on the day, its worst single-day loss since 2000.

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But new and bigger concerns are suddenly emerging about the emergence of AI on the market. One is that, by displacing large numbers of white-collar workers, AI could do real damage to the broader U.S. economy in just a couple of years.

Last weekend, investment research firm Citrini Research published a note titled “The Global Intelligence Crisis of 2028” that outlined a possible scenario – two years from now – when AI’s job displacement has pushed the unemployment rate above 10% and aggregate demand in the economy has begun to plummet as people lose income.

If, like me, you read a lot of commentary on investing and macroeconomics, you would have noticed that the Citrini report was the only thing everyone was writing about at the beginning of the week. To be sure, the authors of the research report emphasized that what they described is a scenario, not a prediction, but the report spooked the markets anyway, and the S&P 500 The index fell 1% on Monday.

Could such a scenario become a reality? And how should investors prepare for this contingency?

Well, the gist of Citrini’s scenario is that AI will get better and cheaper in the coming years. That allows companies to lay off workers, and companies use the savings from doing so to further bolster their AI capabilities, allowing them to lay off more workers. Displaced workers spend less. Companies that sell things to consumers sell less and therefore invest more in AI to protect their margins. Etc.

To cite just a small part of the report on what happens in this scenario between the beginning of 2026 and 2028:

AI capabilities improved, companies needed fewer workers, management layoffs increased, displaced workers spent less, margin pressure pushed companies to invest more in AI, AI capabilities improved… It was a negative feedback loop with no natural brake.

According to the report, all of this resulted in “ghost GDP,” that is, economic output that appears in GDP and productivity figures and corporate profits, but never circulates through the real economy. Is this dark scenario realistic?

No one knows for sure, of course. But many economists have already found holes in Citrini’s fatalistic narrative. Some have pointed out that many of the report’s assumptions are wildly speculative. Others have said that Say’s Law (according to which the additional supply of products and services produced with the help of AI will create its own demand) will kick in and prevent the scenario. Still others have said that AI could increase overall employment in the economy by giving existing workers new tools to do their jobs.

For my part, I take scary headlines and speculative reports with a grain of salt. And I agree with The Motley Fool’s strategy of buying and holding for the long term, that is, identifying companies with good long-term strategies, since they will be the ones putting AI to work in the hands of their employees.

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Matthew Benjamin has no position in any of the stocks mentioned. The Motley Fool has posts and recommends International Business Machines. The Motley Fool has a disclosure policy.

Could AI collapse the economy in 2 years? One research firm says yes. was originally published by The Motley Fool