AI and Power Looms: Stories About Job-Killing Tech Have a Way of Going Viral
Investors can’t resist a good narrative about the futility of human labor.
Photographer: Peter Garritano for Bloomberg Businessweek
On a Sunday in late February, a small investment research firm called Citrini Research posted a 7,000-word essay on Substack that read like a piece of dystopian fiction. The story, narrated from the near future—June 30, 2028—imagines a world in which artificial intelligence has led to mass white-collar layoffs and a stock market collapse in the US. “Two years,” the authors write ominously. “That’s all it took to get from ‘contained’ and ‘sector-specific’ to an economy that no longer resembles the one any of us grew up in.”
The mechanism of economic doom is simple: Companies replace workers with AI. Those newly unemployed people spend less, which hurts businesses’ margins. Businesses respond by pivoting even harder to AI. The authors describe this as “the human intelligence displacement spiral.” Profits accrue to AI companies and their investors, but they don’t pass them along to the broader economy, leading to a phenomenon the authors dub “Ghost GDP.” Fired white-collar workers swarm blue-collar job openings, pushing down real wages. Unemployment passes 10%.