A viral 7,000-word memo by Citrini Research warned that rapid AI adoption could trigger mass white-collar layoffs and a recession by 2028. The report’s dystopian scenario of a “human intelligence displacement spiral” spooked investors, sending the Dow down 822 points, while the S&P 500 and Nasdaq also declined sharply.

A provocative report from Citrini Research, has sent shockwaves through global financial markets by painting a dystopian picture of artificial intelligence's (AI) unchecked success. Framed as a 'thought exercise' dated June 30, 2028, the 7,000-word memo titled The 2028 Global Intelligence Crisis argues that AI's rapid advancement could trigger mass white-collar unemployment, a collapse in consumer spending, and a severe recession - precisely because the technology proves far more transformative than most investors anticipate.

At the heart of the scenario is the report's central thesis - human intelligence, long the scarcest and most valuable economic input, is losing its premium as "machine intelligence has become a competent and rapidly improving substitute for human intelligence across a growing range of tasks." This shift, the authors warn, upends the foundations of modern economies built around knowledge work.

The imagined timeline begins with breakthroughs in agentic AI around 2025–2026, enabling dramatic efficiency gains and cost reductions in software, consulting, finance, legal, and administrative sectors. Companies slash headcounts to boost margins, sparking an 'initial wave of layoffs' that expands earnings and rallies stocks- at first. But the feedback loop turns vicious - displaced white-collar professionals flood lower-paying gig and service jobs, compressing wages across the board and eroding the 70 percent consumer-driven economy.

"AI capabilities improved, companies needed fewer workers, white collar layoffs increased, displaced workers spent less, margin pressure pushed firms to invest more in AI, AI capabilities improved… It was a negative feedback loop with no natural brake," the report describes as the "human intelligence displacement spiral."

By 2028 in the scenario, unemployment climbs to 10.2 percent, the S&P 500 plunges 38 percent from its peaks, and sectors reliant on white-collar productivity - software platforms, payment processors, private credit, insurance, logistics - unravel in a 'daisy chain of correlated bets.'

DoorDash is highlighted as a prime casualty, with AI agents eliminating the human coordination that once fueled its revenue model. The report warns of 'Ghost GDP,' where headline productivity soars but real household incomes and spending collapse, threatening everything from prime mortgages to tax revenues.

The report's viral spread directly contributed to Monday's sharp sell-off on Wall Street. Investors rotated out of AI-exposed and knowledge-economy stocks amid renewed fears of accelerated job displacement. The Dow Jones Industrial Average fell 1.7 percent (822 points), the S&P 500 dropped 1 percent, and the NASDAQ slid 1.1 percent, with heavy losses in names like Datadog, CrowdStrike, Zscaler, IBM, Blackstone, KKR, American Express, and DoorDash.