Investors are no longer questioning whether AI will transform the economy — only whether markets are prepared for the disruption that could come with it
Artificial intelligence has entered a pivotal moment for markets. Corporate spending on AI infrastructure continues to accelerate, technology leaders speak openly about systems that could rival human expertise, and productivity gains appear increasingly plausible.
But anxiety among investors, workers and policymakers is intensifying rather than fading because the concern is no longer if AI will succeed, but how quickly markets must absorb the consequences if it does.
A widely circulated thought experiment from Citrini Research, The 2028 Global Intelligence Crisis, crystallised that unease by imagining a financial shock triggered by rapid AI adoption. In the scenario, companies deploy increasingly capable AI systems across white-collar functions from customer service to coding, dramatically reducing payrolls while boosting efficiency.
Productivity rises, but wages and consumer demand struggle to keep pace.
The authors explicitly frame the exercise as a fictionalised scenario rather than a forecast. Still, it struck a nerve because modern financial systems rely heavily on stable professional employment. The circulation of their report over the weekend contributed to a market slump when markets opened Monday.
Among the latest developments were Anthropic announcing that its Claude Code solution can automated much of the modernization of the COBOL computer programming language. The news sparked IBM shares to fall more than 13% exacerbating their plunge since the start of the month, which could end up being its worst month in more than 33 years.
Worst case scenario
The potential industry-disrupting power of AI could upend multiple industries with the economic fallout spreading widely. The concerns raised in the Citrini report include a scenario where knowledge-worker employment compresses faster than new industries emerge, with the risk of stress cascading through software revenues, credit markets and eventually mortgages.
The report prompted investors to confront a new possibility: that technological success itself could introduce new forms of financial instability.
Those concerns have been amplified by unusually candid warnings from some of the industry’s most influential builders.
OpenAI chief executive Sam Altman recently acknowledged that increasingly capable AI systems could eventually automate aspects of even senior executive roles, underscoring how broadly the technology may reach into professional life. He also emphasised the uncertainty governments face as frontier capabilities advance faster than regulatory and institutional responses. He suggested that even those closest to the technology cannot confidently predict how quickly AI will reshape work or society.
Markets are comfortable pricing risk when probabilities can be modelled. AI introduces uncertainty that resists modelling altogether.
Technology companies are committing vast capital to computing infrastructure and model development while the timeline for returns remains unclear. If AI drives widespread productivity growth, corporate margins could expand dramatically. But if automation simultaneously reduces employment across high-income sectors, consumer demand could weaken, harming economic growth.
80% of jobs could go
Business leaders outside the AI sector are increasingly voicing concerns too.
Speaking recently on The Diary of a CEO podcast, Uber chief executive Dara Khosrowshahi warned that AI could disrupt a large share of existing roles over the coming decade, framing the transition as a societal challenge as much as a technological one and raising questions about how companies and governments manage the pace of change.
Comments like these challenge a long-standing assumption embedded in markets, that technology complements highly skilled labour rather than replacing it.
The broader message emerging from recent interviews is not that jobs will disappear overnight, but that AI appears increasingly capable of absorbing individual tasks that once required specialised expertise. Over time, that incremental substitution could reshape entire professions. History suggests labour markets eventually adjust, but investors are unsure whether adjustment will arrive fast enough this time.
For investors, the uncertainty is not theoretical. Portfolio allocations, capital spending cycles and long-term earnings assumptions increasingly depend on whether AI expands employment and demand — or compresses them.
Previous technological revolutions largely automated physical labour while increasing demand for knowledge workers. AI targets cognition itself by drafting documents, analysing data and conducting research. If the scarcest economic resource becomes less scarce, long-held assumptions about wage growth and consumption may need rewriting.
Maybe it won't be bad?
Many economists argue productivity shocks have historically created more jobs and prosperity over time, even after periods of disruption. AI could ultimately follow that pattern. But markets must navigate the transition before the benefits become clear.
Markets understand that transformative change is coming. What remains uncertain is whether the first beneficiaries will be companies, workers — or industries that have not yet been invented. Until that answer emerges, caution may prove as rational as optimism.
