One AI Doomsday Post Crashed the Market

When Fear Goes Viral: $500 Billion Wiped Out by a Blog Post

A single Substack newsletter crashed Monday's market. The Dow dropped 1.7%. Monday.com and DoorDash each plunged 7%. The culprit? A hypothetical scenario about AI destroying white-collar jobs, published by Citrini Research.

But here's the kicker: it wasn't even news. It was speculation. Yet investors treated it like a prophecy, revealing something profound about the market's hidden anxieties.

The White-Collar Apocalypse Scenario

The post painted a chilling picture of 2025-2026. Companies stop buying software from Zendesk and Monday.com, choosing instead to build their own using AI. They renegotiate contracts or cancel them entirely.

Software companies respond by laying off staff to preserve margins. White-collar unemployment spirals. Remaining workers lose bargaining power, wages deflate. The cycle accelerates: "AI capabilities improved, companies needed fewer workers, white collar layoffs increased, displaced workers spent less, margin pressure pushed firms to invest more in AI, AI capabilities improved..."

Meanwhile, "agentic commerce" — AI that feels no brand loyalty — destroys the moats that companies like DoorDash and Visa depend on. Why pay premiums when AI ruthlessly optimizes for price?

Attacking the "This Time Isn't Different" Crowd

The post's most devastating argument targeted the optimistic consensus. Jerome Powell and others keep saying AI will create as many jobs as it destroys, just like past technological revolutions.

But what if this time really is different?

"The U.S. economy is a white-collar services economy," the authors wrote. "White-collar workers represented 50% of employment and drove roughly 75% of discretionary consumer spending. The businesses and jobs that AI was chewing up were not tangential to the U.S. economy, they were the U.S. economy."

Unlike factory automation that displaced blue-collar workers while creating new service jobs, AI targets the very heart of the modern economy. The result? A "negative feedback loop with no natural brake" — what they called "the human intelligence displacement spiral."

The Market's Tell

Tuesday's futures pointed to recovery, suggesting Monday's crash might be a one-day wonder. But that misses the real story.

As one former Morgan Stanley analyst told Quartz: "Every stock that got mentioned got mauled." A Substack post shouldn't have this power. That it does reveals how fragile investor confidence really is beneath the AI optimism.

Traders and fund managers may publicly champion AI's economic benefits, but their Monday sell-off exposed deeper fears they'd rather not admit.