Mass layoffs, economic crisis: What is the Citrini Research report which is shaking markets? 5 questions answered

• Citrini Research's AI scenario report rattles global markets
• Indian IT firms like TCS, Infosys, Wipro face bleak outlook
• Report warns of mass layoffs and rupee depreciation by 2028

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This year has been a wild ride for the global economy, and the latest doomsday 'scenario' study is adding to the chaos. From Wall Street to Dalal Street, the Citrini Research paper titled 'The 2028 Global Intelligence Crisis: A Thought Exercise in Financial History, from the Future' has triggered shockwaves and rattled investors around the globe. In the US, IBM suffered its worst trading day in the last 25 years. Back home, major tech stocks - Wipro, Infosys, and TCS - were among the top losers in Tuesday's trade.

So, what exactly is this report, and who is this research group? As global investors remain on edge with the AI scare trade becoming the main market theme, here are the top five questions and their answers that you need to know.

Who is Citrini Research, the group behind the viral doomsday report?

As per a report by the Wall Street Journal, the this is a small research group that was founded just three years ago in 2023. Its founder has been identified as James van Geelen, who started writing stock research papers after selling his healthcare company. Geelen has been known as someone who writes on weight loss medicines and AI. The latest viral report was also co-authored by Alap Shah, who is the chief investment officer at Lotus Technology Management. The report has categorically said that it is not a prediction of what will happen in future but a case study of all the scenarios that may unfold if the current AI rollout continues. "What follows is a scenario, not a prediction. This isn't bear porn or AI doomer fan-fiction. The sole intent of this piece is modeling a scenario that's been relatively underexplored," the report says.

What Citrni Research report says about India?

Cutting the very long chase, we come straight to point: The research paper paints a bleak picture for the Indian economy. As per the report, in the first quarter of 2028, New Delhi will be begin 'preliminary discussions' with the International Monetary Fund.

The report further says that the Indian IT sector was largely built on the premise of cost-effectiveness. But with artificial intelligence disrupting the coding business, the dependence on the Indian tech sector will shrink. "But the marginal cost of an AI coding agent had collapsed to, essentially, the cost of electricity. TCS, Infosys and Wipro saw contract cancellations accelerate through 2027," the Citrini Research writes in the viral study. The report also adds that in next two years, the rupee will depreciate further. "The rupee fell 18% against the dollar in four months as the services surplus that had anchored India's external accounts evaporated."

What happens to jobs in this dystopian world?

Well, the essential takeaway of the scenario is - there will be mass layoffs of unpresented levels and the white-collar workers will be the worst-hit. But does this mean that there will be no jobs for humans? Well, that's not what the report says. While most of the service sector will be entirely run by agentic coding tools, humans will still be needed in the loop. AI will create new jobs with some human involvement. "AI has created new jobs. Prompt engineers. AI safety researchers. Infrastructure technicians. Humans are still in the loop, coordinating at the highest level or directing for taste. For every new role AI created, though, it rendered dozens obsolete. The new roles paid a fraction of what the old ones did," the study says about the near future job market.

How can countries cushion the AI impact?

While the world economy is still trying to decode (pun intended) the full impact of the AI revolution, the co-author of the study has some advice for human leadership across nations. In an interview to Bloomberg TV, Alap Shah said that countries should introduce AI tax to help offset the disruption. With more and more people losing their jobs, the economy will take a hit due to lesser consumer spending. Shah argues that taxing the windfall gains due to increased usage of artificial intelligence will help the countries to create policies and new social framework that absorbs this level of disruption. In the near term, Shah expects further market swings, including in software companies, as traders assess the long-term impact from AI. “We are entering a really highly volatile time in the markets,” he told Bloomberg TV.

Is this the final world on AGI disruption?

By the end of the paper, despite talking about the dystopian society, Citrini Research adds that “we’re equally certain that machine intelligence will continue to accelerate. The premium on human intelligence will narrow.” While it has spooked investors, everyone is not convinced. In a lengthy note, Chicago Booth professor Alex Imas says that “the conditions needed for negative GDP growth seem too extreme. Both models assume almost total automation of human work, no policy response, and that institutions do not change. While each of these assumptions might make sense on its own, it is hard to believe all four would happen at once.” Bloomberg columnist Matthew Yglesias also feels that this is bit too much. “I would love to see some economists take a crack at formally modeling this scenario, it’s a cousin of what’s discussed in Eggertson & Krugman (2012) and especially the “paradox of toil” from Eggertson (2010) but I think the treatment of fiscal policy is wrong.” He said on X.