7000-word "AI Ghost Stories" Trigger a U.S. Stock Market Shake! The Instigator: I Didn't Expect This Either

James van Geelen never expected to trigger a major plunge in U.S. stocks on Monday. But that’s exactly what happened…

The 33-year-old founder of Citrini Research released a dystopian scenario forecast about the future of artificial intelligence on his company’s platform on Sunday. Titled “Global AI Crisis 2028,” the report depicts an imagined economic collapse: widespread white-collar layoffs trigger a deflationary chain reaction, causing U.S. unemployment to soar above 10%, and stock market values to evaporate.

By Monday morning local time, this over 7,000-word “AI horror story” had become a hot topic in the market. When the stock market opened, selling began — the S&P 500 quickly shifted from gains to losses, closing down over 1% for the day. An indicator measuring financial stocks’ performance hit its worst single-day performance since April, and major software sector ETFs fell more than 4%.

Citrini’s report also named specific companies, including ServiceNow, DoorDash, and American Express, whose stock prices declined. However, Citrini itself did not short these companies.

By the close of trading, van Geelen’s phone was ringing nonstop, with many potential new clients requesting his research reports or offering feedback.

In response, van Geelen later remarked, “If I had foreseen that this report would cause market volatility, I would never have released it for free…”

Although the stocks and indices heavily impacted on Monday rebounded significantly on Tuesday with the broader market, the day’s panic still revealed how delicate Wall Street sentiment has become in recent months — the mood around AI is shifting from enthusiasm for growth to concern over disruption.

After weeks of selling related to AI in sectors like software, insurance brokerage, wealth management, and cybersecurity, investors were already on edge. Concerns over tariffs and geopolitics on Monday, combined with Citrini’s report and fears that another AI tool from startup Anthropic could cause upheaval, were enough to unsettle the markets.

What is the origin of the “AI horror story”?

Regarding why his report caused such a stir, van Geelen pointed out, “The market is clearly very sensitive to this.”

He said, “This report has undoubtedly become a focus of investor attention — they are already worried about AI’s secondary impact on traditional companies, and when our article revealed the worst-case scenario, that anxiety peaked.”

Citrini’s dystopian scenario, set in June 2028, paints a bleak future: rapid AI advancements greatly boost productivity but also render many human jobs redundant — triggering mass unemployment and a collapse in consumer spending. Ultimately, AI-driven technological change will lead to a “race to the bottom” in white-collar jobs; fears of disruption in the software industry are far from over; the “Global AI Crisis” is imminent.

Clearly, this controversial projection drew criticism after publication. For example, Pierre Yared, acting chair of the White House Council of Economic Advisers, bluntly called it “science fiction.” “Citrini’s report is an interesting piece of science fiction — I like sci-fi too, but I think if you examine it carefully and think long-term, you’ll see it violates some basic accounting principles of economics.”

In response, van Geelen admitted that since the report’s release, he has received overwhelming feedback. One of his most interesting conversations was with an investor who disagreed with the scenario; when asked to explain, the investor’s reply came from Anthropic’s Claude AI chatbot.

“Using AI to think about why ‘AI will replace humans’ is wrong actually weakens your argument,” he said.

Van Geelen explained that the case in the report originated from a conversation with his friend and current Citrini writer Alap Shah. The dystopian AI scenario article was Shah’s first draft. According to the company’s website, Shah is also CEO of AI firm Littlebird and managing partner at Lotus Technology Management.

Van Geelen noted that the report aims to spark dialogue to prevent any of the scenarios described from happening — “We saw a scenario that hasn’t been discussed yet, and it’s one we initially spent a lot of time trying to disprove internally. We can’t guarantee with certainty that the likelihood of this happening is 0%.”

After Silicon Valley Bank’s collapse in March 2023, Wall Street first took notice of van Geelen’s research. He had issued a short-sell alert on the bank at the end of 2022, and months later, the bank went bankrupt. The financial world quickly remembered his name.

In 2023, van Geelen began monetizing his research at Citrini through a paid subscription model. The company focuses on thematic investment research, with about 10 employees headquartered in New York. The platform has built a loyal following, with over 119,000 subscribers. Its research covers topics from modern warfare and humanoid robots to GLP-1 drugs and broader macro trends.

(Source: Caixin Global)