Investors and analysts are growing increasingly anxious about the potential for artificial intelligence (AI) to disrupt labour markets and boost unemployment, sparked in part by a widely shared research memo from Citrini Research that painted a stark scenario of job losses and economic contraction if AI automation accelerates rapidly. That viral warning, which suggests AI could make many forms of work obsolete as companies chase cost savings, has rattled markets and contributed to sell-offs in software and tech stocks.
While some industry voices dismiss such “AI apocalyptic” predictions as overblown, both AI proponents and critics acknowledge that the technology will reshape labour demand in significant ways. Leaders at major AI companies such as OpenAI and Anthropic have stated that AI could displace substantial amounts of work, particularly in white-collar and routine roles, even as they emphasise AI’s potential to create new opportunities in other areas.
Economists and policymakers are already observing early signals of labour market change. For example, Federal Reserve officials have warned that AI-driven displacement could push up unemployment slightly in 2026 as firms adopt automation more broadly — a shift that might emerge before job creation catches up.
The debate highlights wider uncertainty about AI’s real economic effects: while AI investment and productivity promises remain central to tech valuations, there’s deep disagreement about whether AI will ultimately boost economic growth broadly or exacerbate inequality and unemployment. Some economists argue that without conscious policy choices and workforce planning, technological disruption could outpace the creation of new, high-value employment opportunities.
