The stock market just erased -$800 BILLION in market cap because AI "taking over the world" is becoming the consensus view. That view is too obvious. And the "obvious" trade never actually wins. Before we begin, BOOKMARK this article and refer back to it over the next 12 months.
The doomsday scenario went viral because it captured something visceral. It framed AI not as a productivity tool, but as a macroeconomic destabilizer capable of triggering a negative feedback loop: layoffs lead to weaker consumption, weaker consumption leads to more automation, and automation accelerates layoffs.
What's obviously true: AI is not another software feature or efficiency gain. It is a general-purpose capability shock that touches every white-collar workflow simultaneously. Unlikely any revolution in history, AI is getting better at EVERYTHING simultaneously.
But, what if the doomsday scenario is false? It assumes demand is fixed, that productivity gains don’t expand markets, and that the system cannot adapt faster than the disruption.
We believe there is a second path that is being dramatically underpriced. The same Anthropic “takedowns” that look like early signs of systemic collapse may ultimately be the start of the largest productivity expansion EVER.
While the below analysis is not a certain outcome, it is important to remember that humanity has ALWAYS prevailed; and the free market ALWAYS works itself out.
THE ANTHROPIC TAKEDOWNS ARE REAL
Let's start by saying we cannot ignore the market. Anthropic is disrupting the world through Claude, with Fortune 500 companies shedding hundreds of billions of market cap as a result.
It's a story we have seen several times already in 2026: Anthropic releases a new AI tool, Claude gets materially better at coding and workflow automation, and within hours the market collapses for the targeted industry.
If you haven't been paying attention, below are some examples:
IBM stock, $IBM, just posted its worst day since October 2000 after Anthropic announced that Claude can streamline COBOL code
Adobe, $ADBE, falls -30% YTD as generative capabilities compress creative workflows
Cybersecurity names collapse on "Claude Code Security" release
In the above example, the crash in CrowdStrike stock, $CRWD, was literally seen the minute Claude announced "Claude Code Security."
On February 20th, at 1 PM ET, Claude announced "Claude Code Security." This is an automated AI tool that scans codebases for vulnerabilities.
Just two trading days later, CrowdStrike stock, $CRWD, erased -$20 BILLION of market cap on the news.
These reactions are not irrational. Markets try to price real time margin compression. When AI replicates what workers do, pricing power shifts to the buyer. That is the first-order impact, and it is very real.
Commoditization is not collapse. Rather, it is how technology lowers costs and expands access. The personal computer commoditized computing, the internet commoditized distribution, cloud commoditized infrastructure, and AI is commoditizing cognition.
There is no question that some legacy workflows will experience compression of margins. The question is, do lower cognitive costs collapse the economy or do they allow it to expand dramatically?
THE DOOM LOOP ASSUMES DEMAND IS FIXED
The bearish loop creates a simplified linear model: AI gets better, businesses reduce headcount and wages, then buying drops, businesses invest in AI again to defend their margins, and the downward cycle repeats. This assumes a completely stagnant economy.
History suggests otherwise. When the cost of producing something collapses, demand rarely stays flat, it expands. When compute costs fell, we did not consume the same amount of compute more cheaply. We consumed orders of magnitude more of it and built entirely new industries on top.
As shown below, the price of personal computers are now 99.9% cheaper today than they were in 1980.
AI decreases costs in every sector and when service costs go down, purchasing power increases with or without wage growth.
The doom loop becomes dominant only if AI replaces labor without materially expanding demand. The optimistic scenario emerges if cheaper compute and productivity yields entirely new categories of consumption and economic activity.
THE REAL SHOCK IS PRICE COLLAPSE, NOT LAYOFFS
The observable layoffs are an easier story for investors to sell, but services undergoing price compression is the bigger story. Work that involves knowledge has always been expensive because of the scarcity of knowledge, as simple as it sounds, it's true. An abundant knowledge supply leads to a reduction in the price of knowledge work.
Consider healthcare administration, legal documentation, tax preparation, compliance, marketing production, basic coding, customer service, and educational tutoring. These services consume massive economic resources largely because they require trained human attention. AI reduces the marginal cost of that attention.
In fact, as shown below, the US Services Sector contributes close to 80% of US GDP.
If the cost of running a business falls, small businesses become more attainable and if the cost of accessing services falls, more households participate. In a way, AI advancements can function as an "invisible" tax cut.
The companies whose margins depend on high-cost cognitive labor may suffer, but the broader economy benefits from lower service inflation and higher real purchasing power.
FROM “GHOST GDP” TO “ABUNDANCE GDP”
The bear case relies on "Ghost GDP," which is output that shows up in data but does not benefit households. The optimistic counter is what we are calling “Abundance GDP," which is output growth combined with falling costs of living.
Abundance GDP does not require nominal incomes to surge, it requires prices to fall faster than incomes. If AI reduces the cost of services which are essential to many, households experience real gains even if their wage growth slows. As a result, productivity gains do not disappear, rather they are transmitted through lower prices.
Perhaps this is why productivity has outperformed wage growth over the last 70+ years:
The internet, electricity, mass manufacturing, and antibiotics each provided new ways to expand output and reduce cost which still being disruptive and volatile. However, in retrospect, those changes increased the standard of living permanently.
A society that wastes fewer hours navigating systems and paying for redundant services is, functionally, wealthier.
LABOR MARKETS RESTRUCTURE, NOT VANISH
A key concern is that AI disproportionately affects white-collar employment, which drives discretionary consumption and housing demand. This is true, and a legitimate concern, particularly as the wealth divide is already so massive.
However, AI struggles more with physical-world dexterity and human identity. Skilled trades, hands-on healthcare, advanced manufacturing, and experience-driven industries retain structural demand. In many cases, AI complements these roles rather than replaces them.
More importantly, AI lowers the barrier to entrepreneurship. When one individual can automate accounting, marketing, support, and coding tasks, small-scale business formation becomes easier. We are BULLISH on small businesses.
In fact, the removal of barriers to entry through AI may be the solution to flatten the wealth divide that we currently face.
The internet killed certain job categories but created entirely new ones. AI may follow a similar pattern, compressing some white-collar functions while expanding self-directed economic participation elsewhere.
THE SaaS “DEATH” STORY
AI clearly pressures the traditional SaaS business model. Procurement teams are negotiating harder and some long-tail software products face structural headwinds. But SaaS is a delivery mechanism, not the endpoint of value creation.
The next generation of software is adaptive, agent-driven, outcome-based, and deeply integrated. The winners will not be static tool providers, they will be those who can best adapt to change.
Every technological shift reorders the stack and the companies pricing static workflows WILL struggle. The companies owning data, trust, compute, energy, and verification may thrive.
Margin compression in one layer does not imply collapse of the entire digital economy. It signals transition.
AI COMMERCE RESRUCTURES MARKETS
The bearish narrative argues that agentic commerce destroys intermediation and eliminates fees. In part, it does. When friction declines, fee extraction becomes harder.
As shown below, Stablecoin transaction volumes are already skyrocketing, even before AI became with it is today. Why? Because the market always favors efficiency.
Lower systemic friction also expands transaction volume. When price discovery improves and transaction costs fall, more economic activity occurs. This is a BULLISH trend.
Agents acting on behalf of consumers may compress margins for platforms built on habit. Yet, they can simultaneously increase total demand by lowering search costs and improving efficiency.
PRODUCTIVITY IS THE CORE VARIABLE
The ultimate determinant of the optimistic outcome is productivity. If AI delivers sustained productivity gains across healthcare, government administration, logistics, manufacturing, and energy optimization, then the result is abundance and increased access for all.
Even a sustained 1–2% incremental productivity boost compounds dramatically over a decade.
The shifts we are seeing in the macroeconomy as a result of AI have resulted in some of the best investment opportunities in history. This is something we have spent countless hours on and continue to get ahead of. If you are interested in receiving our premium analysis and seeing how we are positioned in these times of disruption, see thekobeissiletter.com for more of our research.
As shown below, productivity is already growing at a rapid pace as a result of AI. US labor productivity accelerated Q3 2025 to its strongest pace in two years:
The pessimistic view assumes productivity gains accrue exclusively to those who build the AI models and do not translate into broader benefits. The optimistic view assumes price compression and new market formation transmit gains more widely.
ABUNDANCE REDUCES CONFLICT, NOT JUST COSTS
One of the most under-discussed implications of AI-driven abundance is geopolitical. For most of modern history, wars have been fought over scarcity: energy, food, trade routes, industrial capacity, labor, and technology. Nations compete when resources are constrained and growth feels zero-sum. But abundance changes EVERYTHING.
If AI materially lowers the cost of production across energy, manufacturing design, logistics, and services, the global pie expands. When productivity rises and marginal costs fall, economic growth becomes less dependent on extracting advantage from others. This will end wars, and potential result in some of the most peaceful times in human history.
The same goes with economic warfare, such as the year-long trade war we are in now.
Tariffs are tools of protection in a world where domestic industries struggle to compete on cost. But if AI collapses production costs everywhere, why would we need tariffs anymore? In a high-abundance environment, protectionism becomes economically inefficient.
History shows that periods of technological acceleration often reduce global conflict in the long run. Post-World War II industrial expansion reduced incentives for direct confrontation among major powers.
AI-driven abundance could accelerate that dynamic. If energy becomes more efficiently managed, supply chains more resilient, and production more localized through automation, nations become less vulnerable. When economic security rises, geopolitical aggression becomes less rational.
The most optimistic AI outcome is not just higher productivity or higher equity indices. It is a world where economic growth is less zero-sum.
CONCLUSION: WHAT IF THE WORLD DOESN'T END?
AI amplifies outcomes. It can amplify fragility if institutions fail to adapt and it can also amplify prosperity if productivity outpaces disruption.
The Anthropic takedowns are signals that workflows are being repriced and cognitive labor is becoming cheaper, a clear transition.
But transition is not the same as collapse as every major technological revolution has looked destabilizing at the start.
The most underpriced possibility today is not dystopia, it's abundance. AI may compress rents, reduce friction, and restructure labor markets, but it may also deliver the largest real productivity expansion in modern history.
The difference between “Global Intelligence Crisis” and “Global Intelligence Boom” is not capability, it is adaptation.
And the world has always found a way to adapt.
Lastly, those who are able to remain objective and follow a process during the current times of disruption are realizing some of the best trading conditions ever.
An objective and systematic approach is what has led to our outperformance of market benchmarks. As shown below, our investment strategy has returned nearly five times the S&P 500 since 2020.
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