Days after Citrini research rocked the market with its chilling prediction of the market a new report by Citadel Securities, a major capital markets firm, is now drawing attention to its very different and more measured view on AI adoption. The report contradicts the worldwide discussion with its warning that AI could eliminate many white-collar jobs and disrupt industries such as IT.
White-collar jobs
The Citadel Securities report presents a more stable and cautious outlook compared to Citrini Research. It says that large-scale job losses may not happen soon as many predictions suggest
According to the report, “Displacing white collar work would require orders of magnitude more compute intensity than the current level utilisation.” so, replacing human workers would require far more computing power than what is currently available.
The report also explains that if AI use increases rapidly, the demand for computing power will rise, making it more expensive. If the cost of using AI becomes higher than the cost of hiring people, companies will continue to rely on human workers. This creates a natural economic limit on how much AI can replace people.
Citadel Securities adds that even if AI technology improves quickly, its real-world use will still be limited by practical factors such as infrastructure, energy supply, regulations and the time organisations need to adapt. As the report says, “Recursive capability does not imply recursive adoption.”
Citrini Research, presents a much more different perspective. It says that improvements in AI could trigger a cycle where companies need fewer workers, leading to layoffs and reduced spending. This would push businesses to invest even more in AI, creating what it describes as a “human intelligence displacement spiral.”
In this scenario, falling incomes among white-collar workers would weaken the economy and even affect areas like mortgages and corporate debt. Citrini says that by 2027, AI disruption could lead to widespread business failures and financial instability, eventually resulting in a major market crash.
S-curve adoption of tech
Citadel Securities’ Research says that the spread of new technologies usually follows a predictable pattern. According to the report, “Technological diffusion has historically followed an S-curve. Early adoption is slow and expensive. Growth accelerates as costs fall, and complementary infrastructure develops.” Over time, however, adoption slows as markets become saturated and further expansion becomes less profitable.
The report notes that “Eventually, saturation sets in, and the marginal adopter is less productive or less profitable,” which naturally slows growth.
Citadel Securities also argues that markets often assume that rapid growth will continue at the same pace, but history shows that adoption usually levels off. This happens because integrating new technology into organisations is expensive and time-consuming, regulations emerge, and economic returns gradually decline.
Citrini Research presents a much darker view of AI adoption, saying that companies facing disruption from AI may accelerate the very changes that threaten them. The report explains this through a cycle in which companies respond to AI pressure by cutting jobs and investing more in automation. As it states, “The company that sold workflow automation was being disrupted by better workflow automation, and its response was to cut headcount and use the savings to fund the very technology disrupting it.”
According to Citrini, companies under pressure had little choice. “The companies most threatened by AI became AI’s most aggressive adopters.” Unlike past technological shifts where established firms resisted change and were gradually replaced, Citrini argues that this time incumbents adopted AI quickly because they could not afford to fall behind.
With falling stock prices and pressure from investors, many firms reduced their workforce and used the savings to invest in AI tools. This allowed them to maintain output at lower costs, but it also strengthened the trend toward further automation. As the report notes, “Each company’s individual response was rational. The collective result was catastrophic.”
Citrini report claims that the money saved from job cuts was reinvested into AI, creating a cycle where “Every dollar saved on headcount flowed into AI capability that made the next round of job cuts possible.”
Productivity vs AI
Citadel Securities explains AI mainly as a productivity boost for the economy. The report says “At its core, AI-driven automation is a productivity shock,” meaning it lowers costs, increases output and supports economic growth over time.
It describes productivity gains as positive developments, noting that they “lower marginal costs, expand potential output, and increase real income” and are generally “disinflationary and growth-enhancing in the medium term.” Citadel Securities argues that past technological breakthroughs, from steam power to computing followed the same pattern.
The report also challenges the idea that AI-driven productivity would automatically weaken the economy. It argues that if companies produce more at lower costs, either prices fall or profits rise. Lower prices increase purchasing power, while higher profits support investment and business growth. According to Citadel Securities if productivity and output rise, demand must also increase in some form, through consumption, investment, government spending or exports. Without this balance, the economic data would not make sense.
Citrini Research, however, presents a different picture. It describes a period of strong economic growth driven by AI, where markets surged and productivity rose sharply. According to the report, layoffs that began in 2026 boosted company profits and stock prices, with savings reinvested into AI technology.
Citrini notes that productivity rose rapidly as AI systems worked continuously without human limitations. However, the benefits were uneven. While companies and technology owners gained wealth, many white-collar workers lost jobs or moved into lower-paying roles, leading to weak wage growth.
The report argues that even though economic data showed strong growth, the gains were not widely shared. This led to what it called “Ghost GDP” economic output that appears in official statistics but does not translate into stronger consumer spending or broad-based prosperity.
Labour markets and economic impact
Citadel Securities argues that the extent to which AI replaces workers depends on how easily companies can substitute machines for human labour. The report says “The critical variable in AI displacement is the elasticity of substitution between AI capital and labour.” If companies can replace workers cheaply and easily, wage income could fall while profits rise.
However, Citadel Securities says this does not automatically mean economic demand will collapse. Even if income shifts from workers to companies, that money can still circulate in the economy through investment, spending, taxation or dividends. The report notes that capital income may be spent differently from wages, but it still contributes to economic activity.
Citadel Securities adds that a major economic decline would require multiple failures at the same time, falling labour income, weak investment and ineffective government policies. It argues that democratic governments would likely respond with policies to soften the impact if large-scale displacement occurs.
The report also says there is little current evidence of widespread AI disruption in employment. According to Citadel Securities, labour market indicators remain stable, and AI-related infrastructure projects such as data centers are even creating new jobs. As it notes, “there is little evidence of AI disruption in labour market data as of today.”
Citrini Research presents a far more tough scenario. It argues that even as AI infrastructure companies continued to grow, the broader economy could weaken. According to the report, technology firms producing AI chips and building data centers continued to post strong revenues and heavy investment even while job losses increased elsewhere.
Citrini suggests that countries heavily dependent on IT services could be particularly vulnerable. It adds that India’s IT outsourcing model could come under pressure as AI coding tools reduce the need for human developers. In this scenario, contract cancellations would rise and export earnings would fall, weakening the currency and external accounts.
The report also warns that AI improvements could accelerate disruption, arguing there would be “no natural floor to the labour market.” It suggests that economies dependent on consumer spending could face serious challenges if large numbers of workers lose income, raising the question of what happens to a system where consumers are increasingly replaced by machines.
US economy
Citadel Securities argues that large parts of the economy remain difficult and expensive to automate. The report notes that the economy includes many kinds of work, physical, supervisory and relationship-based tasks that cannot easily be replaced by machines. Even knowledge-based work faces challenges such as coordination problems, legal risks and trust issues.
Because of these limits, Citadel Securities believes AI is likely to support workers rather than fully replace them. It says “It seems more likely that AI will be a complement rather than a substitute for labor in many areas.” The report points out that past technological changes usually reshaped jobs rather than eliminated human workers entirely.
Citadel Securities adds that a major economic downturn from AI would require extreme assumptions, including near-total automation and weak government responses. To explain its argument, the report asks “was the advent of Microsoft Office a complement or substitute for office workers?” It concludes that while people initially feared job losses, the technology ultimately helped workers become more productive rather than replacing them.
Citrini Research, however, argues that this comparison may not apply to AI. It says the US economy depends heavily on white-collar work, noting that white-collar employees make up a large share of employment and consumer spending. According to the report, the sectors most affected by AI are central to the economy rather than being small or isolated.
Citrini challenges the traditional idea that technology destroys some jobs but creates new ones. It notes that earlier innovations created entirely new industries and occupations, but argues that AI is different because it can perform many of the same tasks humans would move into after losing their jobs.