Wall Street is Experiencing an AI Obsession.

Prior to last week, the name Alap Shah was unfamiliar to many. The 45-year-old financial analyst and tech entrepreneur had spent the last twenty years working largely in the background. However, last weekend, he coauthored a blog with the research firm Citrini entitled “The 2028 Global Intelligence Crisis.” This piece served as a “thought exercise” on the effects of artificial intelligence, forecasting that by June of that year, AI would cause unemployment to exceed 10 percent and lead to a significant drop in the Dow. Written with a tone reminiscent of a prophetic narrative—almost as if auditioning for a role in a future Michael Lewis book—the authors depicted a scenario where AI displaces workers, leading to reduced consumer spending, which in turn results in corporations making layoffs.

While much of the content echoed prior discussions and speculations, tech leaders such as Anthropic CEO Dario Amodei had already suggested that nearly half of entry-level white-collar jobs might vanish soon. Earlier this year, Anthropic’s launch of new agentic tools triggered a selloff on Wall Street. Nonetheless, the report struck with the intensity of a snowstorm sweeping through lower Manhattan. By the time trading closed on the New York Stock Exchange, the Dow had plummeted by 800 points. Alap Shah had suddenly become a name to remember.

However, this achievement is not as remarkable as it might appear. Wall Street, much like the rest of society, is in a constant state of unease regarding AI, and it takes relatively little to ignite a mini-panic. Financial markets don’t always align with reality, but these jitters reveal a broader apprehension. The future of AI is reminiscent of a William Gibson narrative—it exists, but its distribution is uneven—and the insights from those already navigating an AI-driven landscape are both thrilling and disconcerting. Emphasis on disconcerting.

No one—absolutely no one!—can say precisely how AI will affect the economy, but its impact will undoubtedly be substantial. Currently, stock prices are soaring, so it seems sensible to keep the momentum. Yet, as soon as the latest doom-laden manifesto emerges or a report suggests that a traditional sector might be at risk from AI, money managers are quickly reminded of the unresolved challenges before us. A case in point: earlier this month, a small firm (with a valuation below $6 million) that had once sold karaoke machines shifted to AI-enhanced shipping logistics and issued a report claiming it had found efficiencies in loading semi-trucks. That single revelation wiped billions from the market capitalizations of several major logistics companies, none of which had any experience in karaoke.

Following its impact on Wall Street, the Citrini report faced significant backlash. Critics were swift to denounce its shortcomings. They highlighted that AI has made minimal discernible impacts on the economy thus far. Others referenced the historical resilience observed after technological shifts. A sardonic response from the reputable trading firm Citadel Securities stated, “For AI to yield a sustained negative demand shock, the economy must see a material acceleration in adoption, experience near-total labor substitution, no fiscal response, negligible investment absorption, and unconstrained scaling of compute.”

The most severe critiques took issue with the report’s claim that a large portion of the economy consists of non-productive “rent-seeking” by intermediaries and market makers, exploiting the inertia of the general populace. Shah posits that once everyone has several AI agents working in their favor, consumers will effortlessly discover the best products at the best prices. Apps will become obsolete—just enter a request into the LLM and a multitude of agents will manage everything for you. According to Shah, DoorDash epitomizes this trend. Instead of being restricted to the restaurants on the app, consumers will utilize AI agents to identify their ideal dining options, contracting directly with eateries and delivery personnel—no apps necessary. Zero friction! The DoorDashes of the world are merely avocado toast!