Viral 'AI Doomsday' Narrative Fuels Market Anxiety

- The "AI Doomsday" narrative was largely sparked by a report from Citrini Research titled "The 2028 Global Intelligence Crisis," which outlined a hypothetical scenario rather than a direct prediction. This "thought experiment" was amplified by investor Michael Burry, known from "The Big Short," which contributed to its viral spread and impact on the market. - The report's scenario projected a U.S. unemployment rate of 10.2% and a 38% drop in the S&P 500 by June 2028, driven by the mass adoption of AI agents that would render many white-collar jobs obsolete. - The core of the thesis is a "negative feedback loop with no natural brake," where companies lay off workers for AI-driven efficiency, leading to a fall in consumer income and spending, which in turn prompts more cost-cutting through AI. - The market reaction was specific and severe; the S&P 500 software and services index lost about $1 trillion in market value in a week. Companies explicitly mentioned in the report, including Uber, American Express, and Mastercard, saw their shares decline by as much as 7%. - The increased anxiety was also visible in cryptocurrency markets, where Google searches for "Bitcoin going to zero" reached their highest level in the U.S. in February 2026. This coincided with the Crypto Fear and Greed Index hitting a record low of 5, indicating "extreme fear." - While some investors see extreme fear as a contrarian buying opportunity, analysis from Coin Bureau co-founder Nick Puckrin of historical data showed that when the Fear and Greed Index was 25 or lower, the average 90-day return was only 2.4%.