The AI doom-and-gloom scenario captivating Wall Street

The AI revolution may be upon us. But nobody knows for sure what it will mean for measures of overall economic well-being like GDP, unemployment, incomes, and asset prices. The sheer range of possibilities is dizzying. These discussions have been roiling beneath the surface among technologists and economists. Now, they are getting more attention—and not as a distant dystopia, but as near-term risks. Citrini Research and Alap Shah recently published a long, speculative essay that amounts to a doom-and-gloom scenario of where the economy and markets could find themselves in just two years. In their scenario, companies rush to replace human employees with AI tools, only to soon find that demand for their products evaporates just as quickly. This causes a 38 percent sell-off in stocks and problems in credit markets like mortgages, as displaced workers can't pay their loans. "Hopefully, reading this leaves you more prepared for potential left tail risks as AI makes the economy increasingly weird," the authors wrote.