Concerns about the potential economic impact of artificial intelligence triggered a sell-off in tech stocks on Monday, February 23, 2026, with IBM experiencing its largest single-day drop in 25 years. The market reaction followed the release of a report outlining potential risks to the global economy from widespread AI adoption.
Shares of IBM fell 13%, closing at a level not seen since 2000, after Citrini Research published its report, titled “2028: Global Intelligence Crisis,” over the weekend. Other companies mentioned in the report also saw significant declines, including DoorDash Inc., American Express Co., KKR & Co Inc., and Blackstone Inc., which all slumped by at least 6%. Uber Technologies Inc., Mastercard Inc., Visa Inc., Capital One Financial Corp., and Apollo Global Management Inc. Each fell by 4% or more, according to reports.
The report from Citrini Research detailed hypothetical scenarios suggesting mass layoffs could occur as early as 2028 due to the increasing capabilities of AI. This sparked fears that companies will replace workers with cheaper AI algorithms, leading to a decrease in consumer spending and a broader economic downturn. The analysis has fueled a debate about the balance between AI-driven productivity gains and potential job displacement.
Experts Predict Potential Economic Fallout
- A 38% decline in the S&P 500 index.
- A surge in the unemployment rate to 10.2%.
- A collapse in the credit market.
Analysts suggest that while AI is expected to exceed expectations in terms of productivity, it may not translate into economic prosperity for the general population. Instead, companies may initiate large-scale layoffs, substituting employees with more affordable AI solutions. This reduction in consumer purchasing power and declining incomes could force corporations to implement even stricter cost-cutting measures.
This could trigger a destructive cycle: new waves of layoffs aimed at investing in AI leading to further declines in consumer spending, ultimately impacting the social fabric, financial markets, and the real estate sector.
Which Jobs Are Most Vulnerable?
Historically, technological revolutions have created new job opportunities. AI is no exception, with emerging roles in areas like data center engineering and prompt engineering. However, the rate at which new positions are being created is dramatically lagging behind the speed at which existing jobs are being eliminated.
“For every new job created by AI, dozens of existing ones become redundant,” analysts noted.
salaries in these new positions are expected to be significantly lower than previous standards. By 2028, office workers and those in the service sector are expected to be most affected. The manufacturing, construction, healthcare, and skilled trades sectors are anticipated to remain relatively stable.
Despite the potential crisis, some corporations are expected to continue reporting record profits due to minimized personnel costs. However, this money may not circulate within the economy through salaries paid to analysts, lawyers, managers, or programmers.
Economists are referring to this phenomenon as “phantom GDP” – economic activity recorded in macroeconomic reports that does not provide benefits to the real economy or society.
The U.S. Government may eventually intervene, with one proposed solution being a “AI dividend” – a mechanism for redistributing corporate excess profits to citizens who have lost their jobs. However, experts warn that the social structure is deteriorating faster than the legislative process can respond.
