The "Citrini" essay caused a market sell-off not because it was more technically sound than other AI analyses, but because it framed abstract AI risk in the concrete language of finance (SaaS multiples, credit risk), making it resonate powerfully with a Wall Street audience.

Major AI advancements, such as Anthropic's Claude plugins for legal, security, and COBOL, are causing immediate, double-digit stock drops for incumbent companies in those sectors. The market is pricing in the disruption risk in real-time.

Unlike previous technologies like the internet or smartphones, which enjoyed years of positive perception before scrutiny, the AI industry immediately faced a PR crisis of its own making. Leaders' early and persistent "AI will kill everyone" narratives, often to attract capital, have framed the public conversation around fear from day one.

The notable aspect of the Citrini Research piece isn't its dystopian predictions, but its widespread acceptance among investors. Unlike previous 'AI doomer sci-fi,' it's acting as confirmation bias for a market already grappling with AI's disruptive potential. The report's success signals a major shift in 'common knowledge' about AI's socioeconomic risks.

That a single, speculative research paper from Citrini could trigger a market sell-off indicates underlying fragility in current valuations. The market appears highly susceptible to narrative-driven fear, suggesting a general unease about the economy that has little to do with AI's actual, immediate impact.

Leopold Aschenbrenner's technical "AI 2027" paper had similar dire conclusions as the Citrini essay but didn't impact markets. Citrini's piece caused a sell-off because it was framed for a financial audience, demonstrating that the packaging and language of an idea are critical for it to influence different domains.

The $830 billion sell-off in software stocks wasn't a reaction to AI's current capabilities, but to a shift in investor perception. New AI agents made a future "software apocalypse" plausible enough to alter present-day company valuations.

The AI boom can sustain itself as long as its narrative remains compelling, regardless of the underlying reality. The incentive for investors is to commit fully to the story, as the potential upside of being right outweighs the cost of being wrong. Profitability is tied to the narrative's durability.

A viral Substack essay uses a fictional, sci-fi narrative of AI-driven economic collapse not just to scare readers, but to provoke tangible action. This strategy of "action-mongering" can be a powerful tool for lobbyists and advocates to illustrate the consequences of policy inaction and spur change.