Citrini Research Report Sparks Market Turmoil: A Closer Look at the Key Findings

Global Economic Outlook: AI-Driven Scenario Study Triggers Market Volatility

Citrini Research, a small research group founded in 2023, has released a viral doomsday report titled "The 2028 Global Intelligence Crisis: A Thought Exercise in Financial History, from the Future". The report, co-authored by James van Geelen and Alap Shah, models a scenario of the potential consequences of the current AI rollout, rather than making a prediction.

Key Findings:

• The report paints a bleak picture for the Indian economy, with New Delhi expected to begin preliminary discussions with the International Monetary Fund in the first quarter of 2028.
• The Indian IT sector is expected to shrink due to artificial intelligence disrupting the coding business, leading to contract cancellations for companies such as TCS, Infosys, and Wipro.
• The report predicts a further depreciation of the rupee against the dollar, with a potential 18% decline in four months.

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Job Market Implications:

• The report suggests that mass layoffs of unprecedented levels will occur, with white-collar workers being the worst-hit.
• However, the report also notes that AI will create new jobs with some human involvement, such as prompt engineers, AI safety researchers, and infrastructure technicians.

Policy Recommendations:

• The report's co-author, Alap Shah, recommends introducing an AI tax to help offset the disruption caused by the AI revolution.
• Shah also suggests that countries should create policies and a new social framework to absorb the level of disruption caused by the AI rollout.

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Market Impact:

• The report has triggered market volatility, with IBM experiencing its worst trading day in 25 years.
• The report also expects further market swings, including in software companies, as traders assess the long-term impact of AI.

Conclusion:

• The report is not a prediction, but rather a scenario study of the potential consequences of the current AI rollout.
• While the report has spooked investors, not everyone is convinced of the accuracy of the scenario, with some experts arguing that the conditions needed for negative GDP growth are too extreme.