Citrini’s AI scare drives IT index to a 30-month low

A recent report by Citrini Research has triggered a significant downturn in Indian IT stocks, pushing the Nifty IT index to its lowest level in 30 months and marking a 22% decline that has officially entered bear market territory. The report, co-authored by Alap Shah and titled “The 2028 Global Intelligence Crisis,” paints a stark forecast where AI-driven automation dramatically disrupts the traditional labor arbitrage model that Indian IT firms rely on. It projects a scenario by 2028 in which increasing automation causes widespread white-collar layoffs across the global IT industry, severely impacting major Indian IT companies such as Tata Consultancy Services, Infosys, and Wipro.

Citrini Research’s analysis emphasizes that while AI enhances productivity and corporate profits, the economic benefits may not trickle down to workers, resulting in reduced consumer spending and a contraction in the broader economy—a phenomenon they term “Ghost GDP.” This bleak outlook suggests a structural shift in the IT labor market, potentially leading to destabilized markets globally. Despite the warnings, some industry analysts from JPMorgan and HSBC remain more optimistic, arguing that human expertise will still be required to integrate and manage AI systems.

The market response to the report reflects escalating investor anxiety about the pace and impact of AI adoption on traditional IT service models. This episode underscores the growing tension between AI innovations and their socioeconomic implications in key tech sectors like India’s IT services.