Payments Stocks Slide After AI Risk Post Spooks Markets

Wall Street’s risk appetite was rattled on Monday as a widely circulated analysis warning of deep economic disruption from artificial intelligence triggered a pronounced sell-off in software, payments and related stocks, underscoring growing investor anxiety about the pace and consequences of AI adoption.

The catalyst was a speculative scenario published by Citrini Research, a niche financial research outlet, describing a future in which rapid advances in AI automation — particularly “agentic” systems capable of independently performing complex tasks — dramatically reduce demand for white-collar labour, depress consumer spending, and erode traditional business models in software, payments and services. Though framed as a hypothetical outlook rather than a forecast, the thought experiment quickly went viral, circulating widely on social platforms and catching the attention of institutional and retail investors alike.

Stocks Tumble After Viral AI Risk Scenario

On Monday, major names in enterprise software and digital platforms experienced significant declines. Shares of DoorDash dropped around 7%, while Uber fell about 3% and Salesforce slid roughly 5%. Database and cloud infrastructure plays such as MongoDB and AppLovin saw sharper losses, with declines approaching 8% or more. Payment giants including Visa, Mastercard and American Express also weakened, each off more than 4%. The broad software sector ETF declined about 5% as anxiety rippled through markets.

Investors interpreted the analysis as a stark reminder that AI — while expected to drive efficiency and productivity — could also imperil fundamental revenue drivers, particularly in subscription-based enterprise software, delivery services and fee-driven payment networks that depend on human activity, labour income and “friction” in commerce.

The Citrini Scenario: “Ghost GDP” and White-Collar Disruption

The controversial Citrini piece, titled conceptually around a “2028 Global Intelligence Crisis,” explored a chain of events starting with AI tools enabling developers to replicate software applications in weeks rather than months. The scenario foresaw enterprise software firms facing steep pricing pressure and reduced contract renewals as AI assistants automate tasks previously performed by human teams. Hypothetical projections included slower growth in annual contract values and potential layoffs within tech companies — a signal investors found unsettling enough to hit share prices.

The narrative then expanded to consumer-facing platforms like food delivery and ride-hailing, suggesting that AI-powered agents could automatically optimise every purchase and service transaction across competing platforms, eroding brand loyalty and compressing margins. The thought experiment projected that by mid-2028, unemployment could climb above 10% as white-collar job displacement outpaced new job creation, ultimately weakening the consumer spending that fuels corporate revenues and mortgage markets.

Citrini’s authors labelled the piece a scenario analysis rather than a prediction, arguing that sufficiently rapid adoption of advanced AI could produce under-explored “left-tail” risks — rare but extreme outcomes that traditional models overlook. However, the mere publication of this speculative scenario was enough to spook markets already sensitive to second-order impacts of technology and broader economic fragility.

Market Context and Broader Investor Angst

The sell-off in software and payment stocks occurred against a backdrop of heightened economic uncertainty. Sentiment on Wall Street has been fragile after weeks of mixed signals on interest rate policy, global trade tensions, and uneven earnings trends in technology sectors. Analysts say the AI risk narrative compounded existing concerns about corporate profitability and structural shifts in demand, prompting a rotation out of high-beta tech and service stocks into defensive assets and safe havens.

Industry watchers noted that markets are now reacting not just to quarterly earnings or guidance but to narratives about the long-term trajectory of entire business models. For example, enterprise software valuations, for years anchored on steady subscription growth and expanding average revenue per user, now face fresh scrutiny over how AI-augmented quality, pricing power and labour substitution might reshape revenue expectations.

Moreover, the effects have rippled beyond U.S. exchanges. Asian and European markets tracked declines in key indices as traders reassessed risk exposure in technology-heavy portfolios. Although some commentators argue that the speculative nature of the report makes its scenario unlikely in the near term, its popularity underscores how narratives about AI disruption have become pervasive in investor psychology.

Debate Over AI’s Economic Impact

Economists and market participants are divided over the likelihood and timing of the outcomes suggested by the Citrini analysis. Some see AI as a net creator of productivity and new types of labour demand, expanding markets rather than shrinking them. Others argue that without proactive policy responses — such as retraining programs, labour adjustment support and tax structures that address automation’s effects — the economic transition could create mismatches that are painful for labour markets and corporate earnings alike.

Critics of the market’s reaction contend that the sell-off reflects panic more than fundamentals, pointing out that many companies have already begun integrating AI to augment rather than replace their core offerings. They caution that framing AI’s economic impact solely as a dystopian displacement force oversimplifies its dual role as productivity enhancer and growth driver.

Where Markets Go from Here

As trading resumes and analysts digest the implications of the sell-off, markets will likely focus on earnings reports, macroeconomic indicators, and updates on AI technology adoption and regulation. Some traders may view the drop as a buying opportunity in high-quality tech names, while others remain cautious, reallocating to sectors perceived as less vulnerable to rapid automation.

What is clear is that artificial intelligence — long hyped for its transformative potential — is now a central narrative in investor risk assessments, with even hypothetical scenarios capable of driving real market outcomes in an era where expectations and sentiment matter as much as earnings beats or economic data.