What smart people in economics and business are saying about a viral report warning of an AI-driven recession and stock crash
Business Insider
February 24, 2026
AI-Generated Deep Dive Summary
A viral research report warning that AI could trigger mass layoffs and a 38% stock market crash by 2028 has sparked intense debate among economists and investors. The report, published by Citrini Research, paints a hypothetical scenario where rapid AI adoption leads to widespread white-collar job losses and a collapse in consumer spending. While the note was framed as a thought experiment, it sent software stocks tumbling and raised concerns about whether AI could destabilize the economy.
Prominent economists and business leaders have weighed in on the report's implications. Claudia Sahm, chief economist at New Century Advisors, criticized the framing of the scenario, suggesting that markets may overreact to worst-case scenarios. She argued that a labor market crisis of such magnitude would likely prompt strong fiscal and monetary responses from policymakers, which the report downplays. Meanwhile, Michael Burry, famous for predicting the 2008 housing crash, amplified the report, warning of an AI-driven economic cycle with no natural brake.
Critics have also pointed out that markets may be overreacting to a speculative scenario. Brendan Duke, a senior director at the Center on Budget and Policy Priorities, noted that many critics misread the report's premise. He highlighted an underappreciated risk: white-collar layoffs could cascade into financial stress in prime mortgage and private credit markets. Jeff Dorman, chief investment officer at Arca, framed the report's virality as a lesson in investor psychology, suggesting that fear drives market reactions to dramatic predictions.
The debate over AI's economic impact highlights broader concerns about technological disruption. While some view AI as a productivity boom, others see it as a potential destabilizing force. Michael Bloch, a venture capital partner at Quiet Capital, countered the doomsday narrative by emphasizing the potential for AI to create wealth and innovation rather than destruction. He argued that cheaper services from AI could leave households and startups with more money to spend.
Ultimately, the viral report underscores the uncertainty surrounding AI's long-term economic effects. While it may not materialize as a worst-case scenario, its impact on investor
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Originally published on Business Insider on 2/24/2026