Hypothetical scenario sparks real selloff
Concerns about artificial intelligence disruption flared up again Monday, driving sharp losses across sectors ranging from software and payments to food delivery and private equity. The episode sent IBM to its steepest one-day decline in a quarter century.
The selloff gained momentum after a weekend report from relatively unknown research firm Citrini Research circulated widely on social media. The document sketched out a hypothetical future in which AI tools destabilize major parts of the global economy, particularly naming delivery apps and payment processors as vulnerable.
IBM plunge and sector-wide declines
IBM shares dropped 13%, marking their largest single-session fall since 2000. The move followed commentary from AI startup Anthropic, which said its Claude Code product could assist in modernizing COBOL, the legacy programming language deeply embedded in IBM-based systems.
Other high-profile names also suffered. DoorDash, American Express, KKR and Blackstone each declined more than 6%. Uber, Mastercard, Visa, Capital One and Apollo Global Management fell at least 4%.
Anthropic’s suggestion that AI could streamline outdated code fueled speculation that companies dependent on legacy infrastructure might face structural pressure.
A scenario, not a forecast
Citrini Research, founded by James van Geelen, outlined a speculative scenario set in 2028 in which widespread AI adoption triggers white-collar unemployment, falling consumer demand, rising loan defaults and economic contraction. The report clearly stated it was modeling possibilities rather than predicting outcomes.
Among the concepts explored was the idea of “agentic commerce,” where AI systems could bypass intermediaries and reduce transaction fees charged by payment networks such as Mastercard and Visa. The study also imagined delivery services being overtaken by AI-native platforms built through rapid automated development.
DoorDash co-founder Andy Fang responded publicly that agent-driven commerce could indeed reshape the industry, acknowledging that companies must adapt as technology evolves.
Volatility warnings amplify anxiety
Market unease intensified after Nassim Taleb cautioned that volatility could escalate and that certain software firms might face severe stress if enthusiasm for current AI leaders proves misplaced. Taleb suggested that investors may be underestimating structural risks while overestimating the durability of present business models.
The broader market reaction reflects a pattern that traders have dubbed the “AI scare trade,” where sectors perceived as vulnerable to automation or fee compression experience swift and indiscriminate selloffs.
Overreaction or early warning?
Portfolio managers and strategists remain divided. Some argue that the concerns, even if hypothetical, spotlight legitimate long-term disruption risks. Others say markets have responded excessively to speculative analysis.
Michael O’Rourke of Jonestrading described the reaction as remarkable, noting that markets have shown resilience to concrete negative developments yet tumbled after what amounts to a fictional scenario.
With AI adoption accelerating, investors face the challenge of distinguishing between transformational innovation and exaggerated fear. For now, heightened sensitivity to disruption narratives appears to be shaping short-term price swings across technology-linked sectors.
