Why did AI ‘science fiction’ spur market panic? We asked a behavioral-finance expert to find out.
MarketWatch
by Christine JiFebruary 24, 2026
AI-Generated Deep Dive Summary
A recent blog post titled "The Global Intelligence Crisis" by Citrini Research sparked significant market panic, leading to a $200 billion sell-off in software stocks. The post presented a hypothetical scenario where AI replaces human labor, causing economic collapse by 2028 despite rising GDP figures. Investors reacted anxiously, fearing the potential impact of AI on employment and economic stability.
The blog described a future where AI's efficiency drives productivity gains but hollows out consumer economies. This sci-fi narrative resonated with investors, who began selling off shares preemptively to avoid losses. The panic underscores how speculative fears can trigger massive market movements, even when based on fictional scenarios.
This situation highlights the importance of understanding behavioral finance in markets. Investors' reactions often reflect emotional responses rather than rational analysis. The sell-off demonstrates how fear of technological displacement can lead to irrational decisions, affecting stock valuations and broader market dynamics.
For finance enthusiasts, this event illustrates the risks of speculative bubbles driven by hype and anxiety. It also emphasizes the need to consider both AI's potential benefits and its disruptive effects on jobs and industries. Investors must remain vigilant about such trends to avoid getting caught in unwarranted market fluctuations.
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Originally published on MarketWatch on 2/24/2026