Debunking the "2028 Economic Collapse Theory": AI Will Make You Unemployed, But Also Make Everything Nearly Free

Author: David Mattin

Translation: Deep潮 TechFlow

Deep潮 Guide: While the entire industry panics over Citrini Research’s depiction of a “Global Economic Collapse Triggered by AI in 2028,” technology thinker David Mattin offers a completely different interpretation. He believes we are in a period of “Global Intelligent Transformation,” where traditional economic indicators (like GDP, unemployment rate) are losing their relevance. This article explores how, as intelligence becomes as cheap and abundant as air, income may suffer, but costs will collapse even faster, ushering in a new era driven by “unit energy intelligence output.” This is not just a crisis but an aggressive evolution toward a “post-human economy.”

Full text below:

Everyone is talking about Citrini Research’s paper, “The 2028 Global Intelligence Crisis.” It’s a fascinating thought experiment: a speculative report from June 2028 imagining a chain reaction of economic collapse triggered by AI.

The following is a response to that paper. You can see it as a creation consistent with the spirit of Citrini’s original: a speculative “reverse scenario.” It explores new ways of observing, not claiming to have all the answers (no one does). This article draws on years of research and analysis I’ve published with Raoul Pal in Global Macro Investor and our joint tech-focused research service, The Exponentialist.

Citrini Research’s paper has garnered significant attention, and rightly so. It is a cleverly conceived thought experiment: a speculative briefing from June 2028, prefiguring a chain reaction of AI-induced economic melt-down. The S&P 500 drops 38%. Unemployment hits 10.2%. Prime mortgages break down. Private credit complexes collapse under a series of bets on white-collar productivity growth.

This scenario is logically consistent, with detailed financial mechanisms, and its core argument—that extremely abundant intelligence destroys the consumption economy it should strengthen—is provocative. Some parts of it may indeed prove prescient. Real turbulence, even extreme hardship, is ahead. The transition to an era of abundant intelligence will not be smooth.

For over five years, I have been immersed in this line of thinking. I have been building frameworks to understand what happens when intelligence becomes abundant, when the AI-energy flywheel begins to spin, and when we shift from a human-centered economy to something entirely new. In my writings, I’ve described this as a transformation toward a fundamentally new economic system: a “Post-human Economics.” From this perspective, I want to offer a thoughtful response to Citrini’s argument—based on my years of analysis—and arrive at a very different conclusion.

Citrini argues that abundant intelligence destroys the income side of the economy—wages, jobs, consumer spending—triggering a financial crisis. My view is that abundant intelligence also destroys the cost side of the economy—and perhaps even faster. When the prices of goods and services collapse alongside wages, you’re not facing a crisis. You’re in transition to a completely new system; in this system, all old norms, rules, and metrics become incoherent.

So what is the core mistake in Citrini’s article? They are measuring a “post-human economy” with the instruments of a “human economy.” Then they mistake the disarray of these measurements for the collapse of the system.

No one has a crystal ball; no one has all the answers. We are all piecing together a seven-dimensional puzzle that no one can fully understand. But I believe that, despite Citrini’s sophistication, they may have made a profound and instructive error. And my own work points to this.

My timeframe is also longer than Citrini’s. Their scenario unfolds over two years. I am looking at a span of ten to twenty years. I acknowledge serious turbulence ahead: a “Fourth Turning”-style chaos, social upheaval, and institutional breakdown. The version they describe may indeed come to pass. But I argue that the broader forces of AI and the “Exponential Age” will ultimately lead us into a new, functioning economy—one that is in many ways better than anything we know.

The Wrong Metrics

This is the core of what I want to argue; if I am right, it will reshape everything.

Every data point Citrini uses to build their case—10.2% unemployment, 38% drop in the S&P 500, surging mortgage delinquencies in San Francisco, stagnating money velocity—is based on old system metrics. Each indicator originates from the economy we have always inhabited: one centered on human labor, material scarcity, and GDP as the scoreboard.

The authors see these numbers and see disaster, which is understandable. But what if these indicators are not recording the death of the economy? What if they are recording the death of a “measurement framework”—a framework that no longer describes what is actually happening?

Think differently. Citrini’s core concept has a powerful insight: “Ghost GDP”—output appearing in national accounts but never circulating in the real economy. They see this as evidence of dysfunction. But I would invert that view completely. Ghost GDP is not a bug; it’s a signal. It tells us that GDP itself, as a meaningful measure of the current state, is collapsing. The instrument is failing, and Citrini mistakes the readings of a failing instrument for the true condition of the system.

In my research on Post-human Economics, I have argued that as we transition to an economy built on automation and extreme abundance, GDP becomes incoherent. It cannot capture an economy where many goods and services are approaching zero cost—despite uneven speed and sector differences. It cannot capture the enormous improvements in human well-being when intelligence is hyper-abundant and nearly free. It cannot capture the emergence of “Autonomous Economic Activity”—AI trading with AI—completely disconnected from human labor markets.

In a post-human economy, GDP is no longer a coherent measure of anything. So what should we look at instead?

Intelligence Output per Unit of Energy

This is my answer; it is at the core of my thinking about the future post-human economy.

In the coming economy, the most coherent measure of prosperity is “Intelligence Output per Unit of Energy.” How efficiently does our civilization convert energy into useful intelligence?

This metric addresses the core paradox of Citrini’s scenario. Because even as their scenario shows GDP shrinking, the S&P plunging, and unemployment soaring, the “Intelligence Output per Unit of Energy” is skyrocketing.

Think about what drives the crisis Citrini predicts. AI models are becoming more powerful, compute costs are falling, inference costs are plummeting. AI-managed energy systems are becoming more efficient. Every force—those that are destroying old economic indicators—are simultaneously propelling “Intelligence Output per Unit of Energy” upward.

This is the key insight: two lines on a chart. One—GDP, employment, consumer spending—is declining; the other—“Intelligence Output per Unit of Energy”—is rising exponentially. Citrini’s article focuses only on the declining line and concludes we are in crisis. But I argue that the rising line is the real signal; the declining line is just noise from the old system dying.

In a world of extreme abundance of intelligence, everything downstream is better and more plentiful. Scientific breakthroughs, new materials, advanced healthcare, cheaper energy, better infrastructure, more efficient manufacturing—all stem from the same source: our relentless ability to convert energy into intelligence.

Citrini’s article points to North Dakota’s GPU clusters and says: “That machine just destroyed 10,000 white-collar jobs in Manhattan.” I look at the same GPU clusters and say: “That machine just collapsed the costs of drug discovery, materials science, legal services, education, energy management, and software development.” Both are facts, but the article only looks at the income side, almost ignoring the expenditure side.

And that is the deeper mistake.

Radical Prosperity

Yes, output is decoupling from the labor market. Citrini is correct on that. But the same force destroying wages is also destroying costs. When AI drives legal service prices toward zero, you no longer need an $180,000 salary to hire a lawyer; when AI collapses medical diagnostics costs, you don’t need expensive insurance to get a diagnosis. When coding agents make software nearly free, the $500,000 annual SaaS renewal that Citrini worries about is not a vendor’s problem—it’s a huge saving for buyers.

From the GDP lens, this looks like a collapse of consumer economy; but from another perspective, it’s the birth of deflationary prosperity. Wealth created by abundance. Even as nominal incomes fall, real purchasing power explodes. Ordinary people’s ability to acquire goods and services increases in ways that traditional metrics cannot capture.

If someone earns $50,000 but lives in a world where AI has driven the costs of healthcare, education, legal advice, financial planning, software, entertainment, and creative services close to zero, are they richer or poorer than someone earning $180,000 in 2024?

Citrini’s paper never considers this. It tracks wages falling but does not track the simultaneous decline in “costs of living.”

I can hear some readers shouting at me. I am not naive. Some essential goods and services—housing, physical food, and (at least for a time) energy—will not see rapid cost declines. The process will be highly uneven. Some sectors will see costs collapse within a few years; others may take a decade or more. This transition will be painful for many, a key social reality we must face—beyond the scope of this article, but I have written elsewhere about the “sharp turns” ahead and warned that a “Fourth Turning” moment is very likely. Social upheaval and political turbulence are inevitable.

The Foundation Layer Flywheel: The True Brake

But Citrini’s scenario describes this transition as a one-way spiral toward destruction. They say there is no natural brake, no bottom to the displacement loop.

I disagree. The brake is abundance itself.

This leads to what I call the “Foundation Layer Flywheel” engine.

As early as 2023, I wrote about the deep symbiosis between AI and clean energy. AI needs vast amounts of energy, but AI is also the only technology capable of managing the highly complex, distributed energy systems we are building. More AI unlocks more energy; more energy drives more AI. A cycle.

This flywheel is the foundation of the entire Exponential Age. It supports everything above. That’s why Citrini’s alternative spiral has a natural brake—something they did not consider in their model.

As “Intelligence Output per Unit of Energy” increases, the flywheel spins faster. Cheaper, more abundant AI makes energy systems smarter; smarter energy systems provide cheaper energy; cheaper energy makes AI cheaper. Cheaper AI seeps downstream into everything: materials science, manufacturing, healthcare, infrastructure.

Citrini’s article imagines a negative feedback loop: AI destroys jobs -> unemployed workers reduce consumption -> companies buy more AI -> repeat, with no natural brake.

But there is also a positive feedback loop—equally powerful: AI gets smarter -> energy gets cheaper -> “Intelligence Output per Unit of Energy” rises -> downstream costs of intelligence fall -> even if nominal GDP shrinks, material living conditions improve.

Which cycle will dominate? That’s the question. I believe the positive cycle has the support of physical laws. It is driven by exponential improvements in energy-to-intelligence conversion—this curve has been steepening for years, with no sign of slowing. In contrast, the negative cycle is driven by institutional and political inertia: slow-moving mortgage markets, fiscal policies, labor market adjustments. These are real and cause real pain, but they are not immutable natural laws. They are human constructs, and humans can change them.

AI and Robots Are Part of Demography

And one point Citrini’s article completely ignores—and which is one of the most powerful macro forces of our era—is demography.

Developed countries are shrinking their labor forces. The working-age population in the US, Europe, Japan, Korea, and China is declining rapidly. This is what I often call the “demographic doomsday cycle.” Fewer babies, longer lifespans, taller population pyramids—unprecedented in human history.

As Raoul has long emphasized, the golden rule is: GDP growth = population growth + productivity growth + debt growth. Population growth has vanished. It has been gone for some time. That means the only way to keep the GDP game going is to increase debt. We borrow tomorrow’s money to fund today’s party.

Now consider what happens when AI and humanoid robots enter this environment. Citrini describes AI’s arrival as an invasion of a healthy labor market. AI floods in, displacing millions of workers.

This is the economy emerging on the other side of the “Singularity.” It is not a dead zone of mass unemployment, but a world where the old economy has been turned into fertilizer—nourishing something entirely new, strange, and in many ways more prosperous.

But that is not the reality. AI is entering a world that desperately needs it. We are short of hands. The working-age population in the Global North is shrinking rapidly. Without AI and robots, GDP growth will inevitably decline structurally.

Kevin Kelly calls what’s coming “The Handoff.” As human populations peak and decline, billions of AI agents and tens of millions of humanoid entities will fill the gap. We are handing over the economy to non-human actors.

This does not eliminate the pain of individual transitions. People who truly lose their jobs face real hardship, and we must acknowledge that. But at a macro level, AI and robots are not replacing workers—they are filling a demographic void that will soon swallow the entire economy.

Citrini’s scenario imagines AI destroying jobs and no one being able to find work. But what if, by 2028, the reality is more like this: AI and humanoids fill millions of jobs vacated by labor shortages, and displaced knowledge workers—though suffering—are supported and migrate to the emerging economies I am about to describe?

The Residual Human

Because this is something Citrini’s article never considers. As the old economy contracts, a new economy is self-activating from the ground up.

I have written about the rise of independent entrepreneurs. Sam Altman has spoken about this billion-dollar company. In some sectors, AI tools and agents enable a highly productive individual to produce what previously required hundreds of employees. We will see millions of such new economic actors—independent operators and small teams managing large numbers of AI agents—creating enormous value in ways the old framework cannot foresee.

Anthropic’s research on how people use Claude sketches this future. Software development. Consulting. Financial services. Marketing. Content creation. In each domain, highly capable individuals with AI are becoming one-person enterprises. This is a new form of economic activity, largely outside the scope of Citrini’s monitored metrics.

But a deeper transformation is underway. When machine intelligence takes over all cognitive work—coding, legal documents, financial analysis, data processing—the value shifts upward along Maslow’s hierarchy, reaching levels only humans can provide.

I call this “Residual Human.” It involves roles that require human qualities—empathy, meaning, connection, creativity, and the genuine experience of living with other conscious beings. It’s art and storytelling from real, lived experience. It’s the therapist helping you through stress, the guide helping you through life crises, the community builder creating a sense of belonging.

When AI handles all paperwork, what becomes scarce? Emotions. Connection. Meaning. Around these irreplaceable human outputs, a vast new economy will form. It will generate enormous value, but it will not be reflected in GDP or captured by Citrini’s metrics.

This is the economy on the other side of the singularity: not a dead zone of mass unemployment, but a world where the old economy is composted to nourish the new, strange, and more abundant one.

Systemic Transition

Let’s synthesize all this.

Citrini’s article raises a core question: what happens when scarce inputs (intelligence) become abundant?

It’s a very valid question. In all of modern economic history, human intelligence has been a scarce, premium input. They believe this premium is dissipating—and that’s true. Increasingly, machine intelligence has become a competent, rapidly evolving substitute for human intelligence in many tasks. I agree.

But Citrini’s conclusion is that the disappearance of the human intelligence premium equals “crisis.” I see it as “transition.” They are watching the caterpillar dissolve and screaming that it is dying. In a sense, they are not wrong—caterpillars do die. But inside the chrysalis, something else is forming.

What is forming is a post-human economy. In this economy, intelligence is no longer scarce but as abundant as air. Knowledge work and many material productions will approach zero cost—this will not happen overnight, nor evenly across sectors, but the process is relentless. In this economy, the fundamental measure of prosperity is no longer how much nominal output we produce, but how efficiently we convert energy into intelligence. And in this economy, the value exchanged among humans will shift from mental labor to deeper human qualities: empathy, meaning, connection, creativity, and the pure experience of living with other conscious beings.

We are not heading toward a “Global Intelligence Crisis.” We are moving toward a “Global Intelligence Transition.” We are entering a new economic system—one we are all trying to understand. Yes, the transition will be turbulent, even chaotic. There will be upheaval, pain, and political shocks. The “Fourth Turning” is very likely real. Some scenarios Citrini describes—mass unemployment, SaaS industry collapse, frictionless markets—may indeed arrive, and faster than most expect.

But from a longer-term perspective—over ten to twenty years, not just two—their conclusions begin to falter. A Great Recession comparable to the Global Financial Crisis (GFC), with a 57% decline and no natural brake? That depends entirely on whether the old metrics still reflect the true system.

I do not believe they do. There will be real pain, but that pain is a feature of transition, not evidence that the destination is disaster.

Two lines on a chart:

GDP is declining.

“Intelligence Output per Unit of Energy” is rising.

One is a true signal; the other is just noise from a dying measurement system.

If we want to understand what is happening around us, we must watch both.