'Feelings are not pleasant': what Wall Street thinks about the AI report that brought down stocks

A report by little-known research firm Citrini Research on the risks of AI development for the economy alarmed investors and triggered a new sell-off in technology stocks. On February 23, the Nasdaq index fell more than 1%, while Microsoft and Oracle shares lost 3-5%.

In their report, analysts at Citrini, which specializes in stock valuation, describe a hypothetical near-future scenario where AI has replaced office workers. What was initially perceived as a triumph of productivity turns into a collapse of the economy: in Citrini's scenario, unemployment soars, incomes and consumption fall, a flurry of loan defaults begin, the mortgage market collapses, and the S&P 500 loses 38% of its October 2026 highs by the summer of 2028.

After the report went viral online, shares of all the companies mentioned in it fell by several percent. However, the reaction on Wall Street was less clear-cut: many analysts and technology executives found the described scenario unrealistic, Barron's writes. What they say about the report on Wall Street - in Oninvest's material.

- Cult shortstop Michael Burry called the study "brilliant and heartfelt" on social media. And added: "And you say I'm the one with the bearish attitude?"

- "The Citrini report raises real concerns about structural turmoil, even if the situation doesn't ultimately turn out to be a worst-case scenario," Grizzle Investment Management portfolio manager Thomas George told Bloomberg. "Certainly the sentiment is not a good one after reading it, and I'm sure any holder of these stocks will have their confidence diminished," he added.

- "This is a remarkable reaction," noted Jonestrading chief market strategist Michael O'Rourke. - This market has shown incredible resilience in the face of real negative news. Now outright fiction is sending it into a corkscrew."

- CNBC financial expert Jim Cramer called the study a "dystopian fairy tale" and characterized "this vision of a global intelligence crisis ... [as] a stretch." On the contrary, Cramer said, many more jobs will be created than eliminated during the integration of this new technology into manufacturing processes. "I can't help but become increasingly pessimistic ... when I see how easily science fiction can crash the market," he added.

- Michael Bloch, a partner at venture capital firm Quiet Capital, wrote a response essay in the style of the original Citrini study, but with optimistic conclusions: "This is not techno-utopian fiction. The sole purpose of this material is to model a scenario that has remained relatively understudied amid a growing chorus of pessimists predicting the displacement of the workforce by artificial intelligence. The bear scenario associated with the ubiquity of AI has already been articulated in detail. Smart machines replace workers, workers reduce consumption, the economy shrinks, and the financial system collapses under the weight of assumptions that no longer work. This logic is internally consistent, intellectually rigorous, and deserves to be taken seriously. But it relies on a series of assumptions about how economies, labor markets, and human behavior respond to technological deflation-assumptions that have been proven wrong every time they have been tested over the past two centuries."

- "According to research ARK Invest has been conducting since 2014, AI is likely to be the most breakthrough innovation in history. Companies that aggressively adopt AI - like DoorDash - could cut costs, lower prices and spur unexpected revenue and profit growth," ARK Invest founder Cathie Wood wrote in X. Food and grocery delivery service DoorDash was mentioned in the Citrini report as one of the potential victims of the AI boom: the scenario claimed its business would collapse because AI agents could find better prices for consumers. DoorDash shares collapsed more than 6% after the report was released.

- DoorDash co-founder Andy Fang, responding to Citrini on social media, acknowledged that the development of "agent commerce" - where purchases are made by AI assistants - will require his company to reshape its operations: the service must become convenient not only for regular shoppers, but also for algorithms that will choose their own food and make arrangements with restaurants. "The ground is shifting out from under our feet," Fung wrote, "and the industry will have to adapt to that.

This article was AI-translated and verified by a human editor