Citadel Securities rebuts Citrini’s dystopian AI narrative

Investing.com - Citadel Securities released a macro strategy note on Wednesday, challenging the recent Citrini narrative that artificial intelligence will cause widespread white-collar job displacement, citing stable AI adoption data and rising software engineer job postings despite concerns about labor market disruption.

The widely read Citrini blog post sent stocks sharply lower on Monday and led to continued carnage in the already beaten-down software space, with the iShares Expanded Tech-Software Sector ETF (NYSE: IGV) falling 4.8%.

The unemployment rate printed at 4.28% in 2026, while AI capital expenditure reached 2% of GDP at $650 billion and approximately 2,800 data centers are planned for construction in the U.S. Job postings for software engineers rose 11% year-over-year, according to Indeed data cited by Citadel Securities macro strategist Frank Flight.

Data from the St. Louis Fed's Real Time Population Survey shows AI adoption trends remain stable with little evidence of accelerating daily use for work. The firm noted that AI adoption is following a historical S-curve pattern similar to personal computers and the internet, rather than the exponential growth some commentators expect.

Citadel Securities argues that AI-driven automation represents a productivity shock that functions as a positive supply shock, lowering marginal costs and expanding potential output. The firm stated that productivity shocks are disinflationary and growth-enhancing in the medium term, similar to historical technological advances including steam power, electrification and computing.

New business formation is expanding rapidly according to U.S. Census Bureau data, while Citadel Securities' labor market tracking shows improvement in forward-looking components. Data center construction appears to be driving increased construction hiring, the firm said.

"It is also worth recalling that over the past century, successive waves of technological change have not produced runaway exponential growth, nor have they rendered labor obsolete. Instead, they have been just sufficient to keep long-term trend growth in advanced economies near 2%," Flight concludes.

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