I watched the tape blink red and felt the phone in your hand buzz with the same headline: a Substack thought experiment had inexplicably rattled markets. You read the scenario and a cold knot formed — unemployment above 10%, an early 2026 wave of layoffs, and a “ghost GDP” that never touches Main Street. I’ll walk you through what that paper actually claimed, why traders panicked, and what you should be watching next.
Traders watched screens flash red during the sell-off
That’s where the panic started: an essay on Substack called “The 2028 Global Intelligence Crisis” from Citrini Research presented a June 2028 scenario in which U.S. unemployment had climbed to 10.2% after an “initial wave of layoffs” beginning in early 2026. The piece is explicit that it is a scenario, not a prediction, but it strings together plausible mechanisms — AI agents replacing white-collar roles, output that appears in national accounts but never circulates as spending — and hands investors a tidy fear story.
The scenario describes productivity surging while consumer demand collapses, a feedback loop where displaced workers spend less and firms double down on automation. The mood on trading floors folded quickly; stories that sound like fiction can trigger very real selling.
Service stocks, delivery platforms, and payments took the hit on Tuesday
Screens lit up with tickers: software names like ServiceNow slid further, and giants in delivery and payments — DoorDash, Uber, American Express, Mastercard, Visa, Capital One — also fell. Media outlets and traders linked the move to existing sentiment already dubbed the SaaSpocalypse, plus the release of new agent-style features from companies such as Anthropic (Claude Cowork) and the growing reach of ChatGPT-class assistants.
Will AI cause mass unemployment?
You should separate a thought experiment from a forecast. The Substack scenario chains together sensible forces — cheaper AI, fewer workers, weaker consumption — into a worst-case spiral. It’s possible that automation will reshape jobs, but outcomes depend on timing, labor-market frictions, and how quickly new kinds of demand appear.
The market reaction reflects two simple truths: investors hate uncertainty, and narratives spread faster than data.
Analysts and founders argued across headlines and op-eds
In the days after the post, commentary multiplied: some figures warned of rapid progress toward AGI, while others pushed back. Daniel Kokotajlo’s earlier, more sensational AGI timeline got headlines and later revisions; leaders at xAI, Anthropic, and OpenAI — names like Elon Musk, Dario Amodei, and Sam Altman — have signaled urgency, and that amplified the chatter.
Are software stocks at risk from AI?
The short answer: some are, some aren’t. Wall Street is wrestling with whether AI will hollow out niche software moats or make software cheaper and more ubiquitous. One respected CIO warned that moats feel narrower today; others point out that rising AI capabilities could increase demand for new, higher-value applications.
Payments and commerce looked particularly exposed
On trading desks, people compared the threat to business models: stablecoin-driven agentic commerce that slices fees and routes transactions without traditional processors would change the economics for Mastercard, Visa, and bank card franchises. That possibility alone is enough to move large index weights — even if it’s a low-probability event.
How will AI affect payment processors?
If agentic commerce plus stablecoins lowers fees and automates merchant flows, payment margins would compress. That doesn’t guarantee collapse; it forces incumbents to adapt products, partnerships, and pricing. You should watch product announcements from card networks and banks, and any fast moves into tokenized rails or embedded finance.
I’ve read the Substack piece closely: it’s a compelling chain of cause and effect, written to make you feel the shock before you check the probabilities. It uses real vectors — software displacement, agentic services, autonomous delivery, stablecoins — and stitches them into a single, terrifying narrative that functions like a canary flapping its wings in a quiet mine.
But narratives are not forecasts. Markets are trying to price both an AI boom and an AI bubble at once: investors are simultaneously selling software names while fretting about massive AI spend from tech giants. That tension creates volatility, headlines, and the kind of momentum language that feeds further selling.
So what should you actually watch? Track product releases from Anthropic (Claude Cowork), OpenAI (ChatGPT and related agents), and xAI, plus quarterly guidance from major software and payments firms; scan for early demand signals, not just press releases. Watch labor-market data closely, because unemployment and consumption are the real choke points. And keep an eye on flows into tokenized rails and stablecoin usage if you care about payment economics.
There are two honest possibilities: the market has overreacted to a clever thought experiment, or it has glimpsed a plausible path to a structurally weaker consumer base. The answer will live in the numbers, company decks, and product rollouts — and I’ll be following them with you. Is Wall Street reading a canary or a prophecy, and which will matter more to your portfolio?