Could AI collapse the economy within two years? One research firm says yes.

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

Here’s one recent example. On Monday, February 23, AI startup Anthropic PBC announced that its Claude Code tool can be used to modernize the COBOL coding language, a key enterprise asset. international business machine(NYSE:IBM). IBM’s stock price fell 13% that day, its worst one-day loss since 2000.

But newer and bigger concerns about AI are suddenly emerging on the market. One is that AI could significantly damage the entire U.S. economy within just a few years by replacing large numbers of white-collar workers.

Over the weekend, investment research firm Citrini Research released a memo entitled “The Global Intelligence Crisis of 2028,” outlining a possible scenario two years from now in which AI takes over jobs, unemployment rises above 10%, and aggregate demand in the economy begins to plummet as people lose income.

If you, like me, read a lot of investment and macroeconomic commentary, you probably noticed that at the beginning of the week, the only thing everyone was writing about was Citrini’s report. Granted, the authors of the research report emphasized that what they have described thus far are scenarios, not predictions, but the report nonetheless spooked the market. S&P500 The index fell 1% on Monday.

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

Research report says AI could create a loop of destruction in employment

Now, the gist of Citrini’s scenario is that AI will get better and cheaper over the next few years. This will allow companies to lay off workers, and companies will be able to use the money they save to further enhance their AI capabilities and lay off more workers. Workers who leave their jobs will spend less. Companies that sell goods to consumers will sell less and increase their investment in AI to protect their profits. and so on.

Here are just a few excerpts from the report on what will happen in this scenario between early 2026 and 2028:

AI capabilities improved, companies needed fewer workers, white-collar layoffs increased, departing employees spent less, profit margin pressures led companies to invest more in AI, AI capabilities improved… This was a negative feedback loop with no natural brakes.

Source: Getty Images.

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

Of course, no one knows for sure. But many economists have already poked holes in Citrini’s doom theory. Some point out that many of the report’s assumptions are highly speculative. Some say Say’s Law (the law that additional supply of goods and services produced with the help of AI creates its own demand) will kick in and prevent this scenario. Additionally, some say AI has the potential to increase employment across the economy by giving existing workers new tools to do their jobs.

Personally, I take scary headlines and speculative reports with a grain of salt. And I agree with the Motley Fool’s long-term buy-and-hold strategy, which is to identify companies with good long-term strategies to be the ones putting AI in the hands of their employees.

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