Last week, a little-known financial analyst named Alap Shah suddenly found himself at the center of Wall Street’s attention. Shah, co-author of a report titled “The 2028 Global Intelligence Crisis,” predicted a sharp economic downturn driven by artificial intelligence. The report, released by Citrini, suggested that AI-driven job displacement could push unemployment above 10% and trigger a significant stock market decline by next year.
The timing was explosive. On the day the report circulated, the Dow Jones Industrial Average plunged 800 points. This illustrates a core truth about financial markets: they react to fear faster than they react to facts. While many tech leaders have already warned about job losses due to AI, Shah’s report acted as a catalyst for existing anxieties. Anthropic’s recent release of agentic tools already sparked selloffs, proving the market is primed for panic.
The Psychology of the AI Selloff
The market’s reaction isn’t necessarily rational. It reflects a broader unease about the AI revolution, which is unfolding unevenly. Some sectors are already experiencing disruption, while others remain untouched. This unevenness breeds uncertainty. The report tapped into this uncertainty, highlighting the potential for AI to exacerbate existing economic vulnerabilities.
The sudden market shift also underscores the power of narratives. A small company pivoting to AI-powered logistics briefly wiped billions off major competitors’ valuations. This shows that even theoretical disruptions can have immediate financial consequences. Markets don’t wait for proof; they price in speculation.
Criticism and Counterarguments
The report faced swift criticism. Trading firms like Citadel Securities dismissed its claims, arguing that a sustained negative shock would require unrealistic conditions: rapid adoption, mass job replacement, no government intervention, and limitless computing power. Critics also pointed out that historical technological upheavals have been followed by economic resilience.
However, Shah’s core argument – that AI will eliminate intermediaries and force efficiency – struck a nerve. He specifically targeted companies like DoorDash, arguing that AI agents will bypass platforms and connect consumers directly with services. DoorDash responded defensively, highlighting its existing AI integrations and operational strengths. Tech analyst Ben Thompson called the report “economically nonsensical,” yet the damage was done.
A Cycle of Fear and Profit
Shah acknowledged that markets respond more strongly to negative forecasts than positive ones. He plans to release a follow-up report with policy suggestions to mitigate the predicted crisis, but doubts it will calm investors. This is because Wall Street thrives on volatility. Shah himself appears to be profiting from the chaos, hedging his portfolio with investments in AI chipmakers (like Nvidia) and short positions on companies he believes are vulnerable.
Even Nvidia’s record earnings couldn’t prevent a 5% stock drop the following day, proving Shah’s point. Markets remain fixated on the downside, regardless of positive developments. This dynamic highlights the irrational, often self-fulfilling nature of financial panics.
Ultimately, the Wall Street reaction to Shah’s report wasn’t about the accuracy of his predictions, but about the power of fear to drive short-term market movements. The AI future remains uncertain, but one thing is clear: investor anxiety will continue to shape the narrative, even in the face of contradictory data.
