Viral Doomsday Report Lays Bare Wall Street's Deep Anxiety About AI Future 52
A 7,000-word "doomsday" thought experiment from Citrini Research helped trigger an 800-point drop in the Dow, "painting a dark portrait of a future in which technological change inspires a race to the bottom in white-collar knowledge work," reports the Wall Street Journal. From the report: Concerns of hyperscalers overspending are out. Worries of software-industry disruption don't go far enough. The "global intelligence crisis" is about to hit. The new, broader question: What if AI is so bullish for the economy that it is actually bearish? "For the entirety of modern economic history, human intelligence has been the scarce input," Citrini wrote in a post it described as a scenario dated June 2028, not a prediction. "We are now experiencing the unwind of that premium."
Many of Monday's moves roughly aligned with the situation outlined by Citrini, in which fast-advancing AI tools allow spending cuts across industries, sparking mass white-collar unemployment and in turn leading to financial contagion. Software firms DataDog, CrowdStrike and Zscaler each plunged more than 9%. International Business Machines' 13% decline was its worst one-day performance since 2000. American Express, KKR and Blackstone -- all name-checked by Citrini -- tumbled. That anxiety, coupled with renewed uncertainty about trade policy from Washington, weighed down major indexes Monday. The Dow Jones Industrial Average led declines, falling 1.7%, or 822 points. The S&P 500 shed 1%, while the Nasdaq composite retreated 1.1%.
[...] Monday's market swings extended a run of AI-linked volatility. A small research outfit that has garnered a huge Substack following for macro and thematic stock research, Citrini said in its new post that software firms, payment processors and other companies formed "one long daisy chain of correlated bets on white-collar productivity growth" that AI is poised to disrupt. [...] Shares in DoorDash also veered 6.6% lower Monday after Citrini's Substack note called the delivery app a "poster child" for how new tools would upend companies that monetize interpersonal friction. In the research firm's scenario, AI agents would help both drivers and customers navigate food deliveries at much lower costs.
Many of Monday's moves roughly aligned with the situation outlined by Citrini, in which fast-advancing AI tools allow spending cuts across industries, sparking mass white-collar unemployment and in turn leading to financial contagion. Software firms DataDog, CrowdStrike and Zscaler each plunged more than 9%. International Business Machines' 13% decline was its worst one-day performance since 2000. American Express, KKR and Blackstone -- all name-checked by Citrini -- tumbled. That anxiety, coupled with renewed uncertainty about trade policy from Washington, weighed down major indexes Monday. The Dow Jones Industrial Average led declines, falling 1.7%, or 822 points. The S&P 500 shed 1%, while the Nasdaq composite retreated 1.1%.
[...] Monday's market swings extended a run of AI-linked volatility. A small research outfit that has garnered a huge Substack following for macro and thematic stock research, Citrini said in its new post that software firms, payment processors and other companies formed "one long daisy chain of correlated bets on white-collar productivity growth" that AI is poised to disrupt. [...] Shares in DoorDash also veered 6.6% lower Monday after Citrini's Substack note called the delivery app a "poster child" for how new tools would upend companies that monetize interpersonal friction. In the research firm's scenario, AI agents would help both drivers and customers navigate food deliveries at much lower costs.
Alright, kill the AI then (Score:5, Insightful)
It's bad news all around. If it doesn't work, trillions of dollars wasted. If it does work we have no economy. Time to shoot Sam Altman and the other AI bros into the sun. They can even use one of the rockets made by their fellow AI bro Elon.
Re:Alright, kill the AI then (Score:5, Insightful)
This isn't an "AI" problem at all, it is a problem of a weakening economy, brought about by decades of eroding fundamentals for short-term profits, sped up by a moronic rush to idiocracy and kleptocracy.
The "AI" is just one of the many corruption schemes.
Re:Alright, kill the AI then (Score:4, Insightful)
This isn't an "AI" problem at all, it is a problem of a weakening economy, brought about by decades of eroding fundamentals for short-term profits, sped up by a moronic rush to idiocracy and kleptocracy.
The "AI" is just one of the many corruption schemes.
I've long been of the opinion that the AI is just the greed that drives most of our big decision makers given digital form. All of the current gen LLM AIs are driven by sucking up all the data, everywhere, then claiming proprietary right to it as a fully owned component of the datastore that houses it. As I've said elsewhere, it's "GIMME THAT! IT'S MINE!" in the digital realm, and it's the only thing that seems to matter at all to these people. While they throw some neat window dressing up claiming they'll also take all human work at some vague point in the future, the important part to them is taking as much as they can. Data, energy, technological manufacturing, you name it. They want it. All of it. And the ultimate outcome of all that greed is meaningless, so long as they can continue to feed it.
Scarcity thinking misuses tools of abundance (Score:2)
Indeed, greed (aka "love of money") is especially dangerous when it is backed by powerful tools. As I say in my sig: "The biggest challenge of the 21st century is the irony of technologies of abundance in the hands of those still thinking in terms of scarcity."
In more depth by me on that irony: https://pdfernhout.net/recogni... [pdfernhout.net]
And on the economics of all this, from 2010: https://pdfernhout.net/beyond-... [pdfernhout.net]
"This article explores the issue of a "Jobless Recovery" mainly from a heterodox economic perspective. It
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AI may be a failure economically; however, its true purpose is surveillance. It is succeeding greatly at that. AI can watch hours of video quickly to determine if you were in the scene. AI can utilize links between databases to form a coherent social view of your actions over your lifetime to determine if you are a "good citizen" or not.
AI may be an economic disaster, but it is a fascist's wet dream. Betting against AI is not a path towards wealth and power.
Let's think about this for a moment... (Score:5, Insightful)
If one single blog post can create so much uncertainty in these businesses that it triggers an 800 point drop in the Dow, what does that say about the fragility of the businesses themselves?
Re: Let's think about this for a moment... (Score:5, Interesting)
I think it says a lot about the amount of uncertainty in the market. Nobody knows what's going to happen next, and investors are skittish.
It's just what Kurzweil predicted -- as the pace of change keeps accelerating, peoples' ability to predict the future gets compressed into a shorter and shorter time-window, like driving at night and outrunning the headlights of your car.
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The problem is that the scenario painted in the post is kind of obvious and likely.
The more people become unemployed because of AI, something thats already well underway, the less consumer money is available to spend. This reduces the monetary velocity in the economy, and this in turn causes a recession.
The startling thing for me in the scenario is what happens to all those mortages as the middle class starts getting hollowed out by AI. Nothing good. We already saw what happens when mass defaulting occurs
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Then the banks get a bailout and get to keep all the foreclosures, which they will refuse to sell at market rates, so they will a) rot and b) attract crime. We will continue to sell out the future in the name of the love of money.
Re: Let's think about this for a moment... (Score:3)
That the global markets are becoming more and more like the cryptocurrency markets.
In a way, they are similar - both run on pure speculation.
Re:Let's think about this for a moment... (Score:5, Interesting)
To borrow a quote from the post below, "as the pace of change keeps accelerating, peoples' ability to predict the future gets compressed into a shorter and shorter time-window,"
Building a new plant to produce polysilicon for solar panels took three years after two years of planning and design. The current RAM shortage is from a sudden change in demand. Assume it takes three years to build another one of them. Do you build it? Will the demand last or will the bubble burst and leave your investment stranded?
There is the uncertainty. Business hates uncertainty. Even the Chinese messed up their housing plans and created a giant boom and bust they are still trying to recover from.
The AI software could become an exponential growth situation leading to nirvana, or it could implode tomorrow when an AI gets control of something, screws it up and kills a bunch of people and the Butlerian Jihad comes early. Which way do you bet? The physical world has a lot longer time constants than the digital world which is a continuing problem with process control, That problem is generalizing to society in general.
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There will be no nirvana if you aren't literally sitting on billions in assets as long as our current oligarchy capitalistic system remains in place. Collapse in market value will even pull the previous generation that was able to accumulate some capital value into the abyss. The endgame will be the favela-ization of the US economy with a tiny aristocracy of unimaginable wealth controlling virtually all property and the government apparatus and military, and the rest of the population at subsistence levels.
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It says that Marx is laughing from his grave and calling for butlerian jihad of the new prolerariat, what else?
Re: Let's think about this for a moment... (Score:2)
It soes not take much to pop a bubble.
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Let's see, what kind of rumor can we slashdotters collective spread to finally force the pop so computer parts are no longer so damned expensive?
Re: Let's think about this for a moment... (Score:2)
We're so small and isolated of a community that I don't think there is much we can do.
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That's not why the market nor IBM dropped (Score:5, Insightful)
The market dropped due to tariff mess in general, not some survey as this article alleges. The assertion that IBM dropped today due to some fear of AI economic effect is just wrong. It was the news of Anthropic threatening to eat IBM's own lunch, using Claude to help folks upgrade from COBOL, something IBM should have been able to do with its own AI tools.
This is market manipulation (Score:3)
One day it's "AI Bubble is Going To Burst", the next it's "AI Is Going To Eat The Economy".
Re: This is market manipulation (Score:4, Insightful)
Both are simultaneously possible.
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Those that accuse a large percentage of the population of having some flaw are always the ones that actually possess it. Put simply - the projection here is laughable.
Also, how does one "vote harder"? You either vote or you don't. It's not like the voting machines measure how hard you've touched the screen.
Re: 90 percent of people are useless and have no v (Score:1)
Re: 90 percent of people are useless and have no v (Score:2)
Things is that folks already know perhaps most office workers are superfluous. AI won't shine a new light on that, though it could rationalize some shift in strategy towards them.
Several factors into why office workforce is padded, people wanting to brag about number of professional reports, people wanting sacrificial headcount for layoffs, leaders having no idea who is and is not useful, politics sometimes outclassing productivity...
Ah, the word famous Citrini Research (Score:2)
I was wondering when they'd weigh in.
is it me (Score:2)
or is TFS kinda hard to read?
Random blog post, or tariffs and politics? (Score:3)
In terms of white collar work becoming obsolete, it's interesting how no one is pointing out that blue collar jobs would be even more obsolete. If an AI is intelligent enough to take all white collar work, then technically it's "over qualified" for blue collar work. But that wouldn't fit into the narrative being pushed that we should all go into HVAC and other blue collar jobs. Don't get me wrong HVAC is a great job, but it's even more vulnerable to AI than we are.
I don't buy any of these doom and gloom scenarios for a second. People thought computers would take their jobs and look where we are. The same thing is going to happen with AI.
but computers actually did take all the jobs! (Score:5, Interesting)
Computers were mostly women, who did basic math as a job. The machines replaced all of them.
Re: Random blog post, or tariffs and politics? (Score:5, Insightful)
Genuinely curious, how are blue collar jobs that require climbing into attics and crawlspaces and generally performing physically demanding/relatively high dexterity tasks in addition to solving the vision and planning problems associated with any basic hvac, plumbing, or electrical job, more ripe for replacement by Ai than desk jobs that only need computation?
You need to solve a whole class of physical robotics challenges that no one has demonstrated they can solve at a speed needed to compete with a human or in a real world diverse environment.
Boston robotics showing a robot doing cartwheels is not the same thing as climbing into an attic and balancing on joists while running new thermostat wires.
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When most of the middle class is unemployed who is going to pay someone to crawl around in their attack, human or robot?
Attack? Freud was here.
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Don't worry, the middle class won't have attics anymore. Their multinational conglomerate landlords will pay the people to crawl around in attics, while the former middle class subsists on some semblance of UBI, calibrated just high enough to prevent real social unrest. Everything will be fine.
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Assuming you're a STEM curious person since you're on Slashdot, then unless you're physically disabled, the reason you hire that work out is because it is unpleasant, not because you can't do it. I'm a cheapass and do my home maintenance myself, if you played with Legos as a kid then you have both the dexterity and the ability to read instructions to do plumbing, HVAC, or electrical while reading construction codes for the 'how to'. The woodworking part of it is fun enough I took it up as a hobby!
No disagreement that white collar workers are capable of doing blue collar work (with training/guidance...i do think it's a bit presumptive to assume white collar skills are a superset of blue collar ones. I've done some basic electical, plumbing, automotive, and hvac work, but i'm certainly not flushing refrigerant lines or replacing a furnace, swapping out a transmission, or other "major" projects, there is a whole other category of training+experience required with those kinds of jobs to do them right).
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Note that white collar jobs aren't all 'intelligent', there's a fair amount of tedious manipulation of purely abstracted data in computers. This is the part that, in theory, maybe, could be changed by LLM approaches. Some debate can be had about which white collar jobs are which, and how far the LLM can go or not, but those at least are in the ballpark.
If a part of a given blue collar job couldn't be done with gloves more substantial than medical gloves then it's pretty far from being within the reach of
Wrong doomsday (Score:2, Insightful)
There seems to be a concerted effort to flood the media space with AI related hopium as of late. All these x industry is doomed cuz AI articles not linked to any substantive advance or change in the AI landscape wreak of desperation. The real story is the AI bubble is bursting.
Re: Wrong doomsday (Score:3)
multiple doomsday scenarios (Score:2)
Like a Russian nesting doll of doomsdays. We will remove one only to find another waiting for us.
Our fate has been a series of FAFO that has been decades in the making.
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The strange thing is the bubble can burst at the same time as it can also disrupt white collar labor dynamics, regardless of whether it is capable or not.
It's no secret that office labor force has a great deal of padding, and a shift in business leadership mindset could cause a reckoning. Generally office workers are presumed to be worth keeping around for various non-core reasons and if 'AI leadership' displaces the ego of 'I have lots of professionals under me' as the valued attribute, well they might st
Post hoc ergo propter hoc (Score:2, Troll)
Not AI, Classism is gutting our economy (Score:2)
economic hoarding is just sucking all the capital out of the economy, of course there will be a collapse, history keeps repeating itself because people are more greedy than we are intelligent
greed and stupidity are our real problems
I have a solution! (Score:2)
The analysis is flawed. (Score:2)
I read it yesterday, and the biggest miss is that it makes an unfounded assertion that the human processes and loops can change that quickly. Secondarily, it makes the assertion that the ecosystem can be secured in one year, or that people will just stop caring that they could lose all their money at the drop of a hat. (And somehow crypto will be able to scale in a way it couldn't over the last decade.)
We are still in a ten year process of continually exposing bottlenecks with a large group of bad actors re
Let Me Guess (Score:2)
The ultimate billionaire plan, once a few thousand folks are able to run the world through data agents and robotics, they'll outlaw poverity with a sentance of death if found guilty?
Doomerism (Score:2)
Almost every single prediction of doom by humans ends up being false. We are an easily frightened species and we don't stop to rationally analyze predictions of doom.
We are, however, very good at adaptation. Nearly any doom you can imagine, we end up working around. Fear of something doesn't stop us from fixing it.
The exception is mass murder. We haven't yet been able to stop powerful men from killing millions if they feel like it. We should be a lot more frightened of authoritarians than technology.
It's starting (Score:2)