Software stocks crater as independent research piece details potential AI dystopian scenario

Software stocks got shellacked yesterday as a post published by Citrini Research and Lotus Technology Management managing partner Alap Shah sharpened attention on the magnitude and breadth of losers from the AI boom.

The piece, titled “The 2028 Global Intelligence Crisis,” is a hypothetical scenario analysis exploring the left-tail risks in two years’ time in a world where there’s an aggressive AI build-out and adoption of AI agents.

“What follows is a scenario, not a prediction,” the authors wrote. “Hopefully, reading this leaves you more prepared for potential left tail risks as AI makes the economy increasingly weird.”

The hypothetical pain points for the software industry include software-as-a-service companies forced to offer steep discounts to customers for 2027 renewals to avoid being displaced by new AI tools, and “systems of record” like ServiceNow issuing dire results and job cuts as the potential for in-house builds weighs on growth and pricing.

“What if our AI bullishness continues to be right... and what if that’s actually bearish?” the authors added. Stocks that finished between 8% and 12% down on the day included CrowdStrike, AppLovin, Atlassian, GitLab, Datadog, and Asana.

The Takeaway

Anyway, the market seemed genuinely spooked by the “scenario.”

The original tweet with a link to the piece from Citrini Research, which was founded by James van Geelen, has received 6.5 million views, been retweeted over 2,600 times, and bookmarked 15,000 times just after market close on Monday, per X, and van Geelen’s profile was among the most viewed on the Bloomberg Terminal.

OpenAI’s planned cash burn was unlike anything we’d ever seen — now they’re doubling it

As we noted last year, the sheer scale of OpenAI’s cash burn plans have been unlike anything we’ve ever seen. And we now know the company’s cash burn forecasts are actually even more insane than we previously thought. Following a report from The Information that Project Stargate is a “chaotic mess,” the outlet also reported that OpenAI expects to burn through $218 billion between 2026 and 2029.

See how it compares to Uber, Netflix, and Tesla