There is more bad news for the Indian IT sector. On Monday, the sector found mention in two reports. One rather incoherent from Citrini Research and another from meticulous and thorough Jeffries. Both, however, reach conclusions that look catastrophic for the Indian IT giants. In a note, which was posted on the official website and which has gone viral on social media with millions of views in just a few hours, Citrini notes that in 2028 “the services surplus that had anchored India’s external accounts evaporated.” In other words, according to Citrini, the country’s IT sector by 2028 is going to be decimated by AI.
Jeffries, which issues financial market research notes and recommendations, has something similar to say. Although, it is not talking about 2028 but present. Or rather what should investors do when it comes to Indian IT giants. In a note, Jeffries says that AI would be putting a tight squeeze on the revenue of companies like TCS and Infosys. It then suggests that keeping in mind the modest revenue growth, and worse margin in future, a price target for IT stocks that is up to 33 per cent less than their current prices.
Citrini believes AI will devastate economies, including in India
While based on thin arguments, there is a reason why Citrini piece has gone viral. The piece, sort of, imagines the worst case scenario for economies around the world in 2028. It argues that due to AI the world as we know will end as far as economics is concerned.
The piece titled, THE 2028 GLOBAL INTELLIGENCE CRISIS, is written from the point of view of someone who has lived through the next two years and is now looking back. In the piece, which has been viewed 3.2 million times on X, the researchers have painted a picture of a global intelligence crisis from the speculative vantage point of June 2028. In other words, they are telling us what the world economy might look like two years from now.
Though research, which took 100 hours according to the authors, talks about the world at large, its critical analysis of India and how the rise and rise of AI would leave the Indian economy in tatters, is particularly scary.
In Citrini’s simulated 2028, the Indian Rupee has collapsed by 18 per cent against the dollar and over $50 billion in market value has been wiped out from TCS, Infosys, and Wipro in a single month. By Q1 2028, the piece imagines, the IMF has entered preliminary discussions with New Delhi, hinting that the Indian economy has almost failed. Why did this happen? The value proposition of Indian IT was seemingly neutralised by AI agents whose marginal cost was merely the price of electricity.
“The entire model (of India’s IT services sector) was built on one value proposition: Indian developers cost a fraction of their American counterparts. But the marginal cost of an AI coding agent had collapsed to, essentially, the cost of electricity,” the researchers say, adding “The engine that caused the disruption got better every quarter, which meant the disruption accelerated every quarter.”
Of course, India is not the only one to suffer. The entire global economy is in doldrums.
“Human intelligence derived its inherent premium from its scarcity. Every institution in our economy, from the labor market to the mortgage market to the tax code, was designed for a world in which that assumption held,” Citrini writes in his note. “This is the first time in history the most productive asset in the economy has produced fewer, not more, jobs. Nobody’s framework fits, because none were designed for a world where the scarce input became abundant.”
Thin arguments, wishful thinking?
While Citrini provides research and insights that people pay for, its latest piece has been shared on social media. It is accessible to all and not just subscribers. It is also, according to the firm, not “bear porn or AI doomer fan-fiction”. Instead, the “sole intent of this piece is modelling a scenario that’s been relatively underexplored.”
While there are many people on social media who have found the piece to have value, a similar number has also slammed it, with one calling it “smut for men.”
Another X user wrote, “Citrini is SPIKING everyone’s CORTISOL levels through the roof. BUT they’re just jestermaxxing the SF AI doom narrative.” While another one added, “The Citrini AI piece is a litmus test for who in the public intellectual space is interested in serious analysis and who is interested in fantasy fiction masquerading as serious analysis.”
The arguments against the Citrini piece do have some merit. The article makes a number of assumptions, leading up to June 2028. It overstates the impact AI can have on legacy workflows, at a time when the AI tools like Claude and Codex are barely used outside a select group of techies. While it seems that AI will profoundly impact the world of work, and consequently various economies, unlike the doomsday scenario and a rupture presented by Citrini, the changes may come slowly and gradually. At the same time, the Citrini piece also does not take into account the institutional inertia inbuilt in human societies that naturally slow down changes. It also doesn’t account for the policy side of things. If the change gets accelerated, the way Citrini argues it will, it is certain that governments will step in to manage the pace.
