- In today’s CEO Daily: Diane Brady on what keeps a “Ghost GDP” scenario from becoming reality.
- The big leadership story: There may be a Ghost in the future economy, but for now there’s ‘betrayal,’ says KPMG’s top economist.
- The markets: European markets drop as Trump’s tariffs take effect at 10%.
- Plus: All the news and watercooler chat from Fortune.
Good morning. What’s the prognosis for the economy if AI turns out to be fantastic for profits and disastrous for demand? That’s the scenario explored in a viral essay titled “The 2028 Global Intelligence Crisis.” Co-authored by James Van Geelen, founder of analysis firm Citrini Research, and AI entrepreneur Alap Shah, it imagines a near-time future in which real wage growth collapses as white-collar workers lose jobs while owners of compute see their wealth explode, resulting in a “Ghost GDP: output that shows up in national accounts but never circulates through the real economy.” (Van Geelen wrote that he spent 100 hours on the essay, a poignant metric, perhaps, in an era where AI could write up any scenario in seconds.)
There are plenty of predictions about AI’s economic impact, good and bad, for those who seek them out. There are also signals right now that indicate disruptive change is already happening: a record gap between corporate profits and worker pay, staggering salaries at AI firms for workers with analog skills, predictions of job loss in everything from Uber drivers to office work, and of course the recent rout in tech stocks.
CEOs are not oblivious to these risks. Most are focused on using AI to redesign work and not just shrink headcount or grow profits. Cognizant CEO Ravi Kumar S, for one, is planning to hire about 25,000 junior workers this year, a 20% increase over 2025, as AI puts expertise in the hands of more junior talent. (For a deeper dive on his “Hollywood model” of hiring, check out my recent interview with him.) IBM is also tripling the number of Gen Z entry-level jobs, as are others. That’s good news for those who worry about AI disrupting opportunities for the next generation of leaders, though it’s unclear how democratized expertise will impact skilled workers higher up the pyramid. IBM shares lost 13% of their value yesterday after Anthropic announced that its Claude Code tool can help modernize Cobol programming language that runs on IBM computers.
The economy is clearly shifting in ways that require business models to follow suit. Agentic commerce will undermine any model that relies on inertia, human friction, or inconvenience to survive. Machines have infinite time and patience to optimize costs, plan itineraries, recalibrate portfolios and eliminate overpriced subscriptions. If AI can spot a recurring source of cash flow that’s not delivering a return on investment for its user, it will eliminate it. That’s good for those who have money to spend.
While many of these trends could exacerbate a K-shaped economy of increased wealth at the top and desperation at the bottom, another factor could alter that trajectory: politics. In democratic economies, however flawed, every consumer gets one vote. Declining tax revenue and expanding safety nets are not sustainable, nor is a wave of innovation that lifts a few boats while threatening most of the fleet. The need to create shared prosperity is growing more acute. Leaders who are deploying—and regulating—AI need to balance how much these new tools will save with how much they ultimately will cost. Otherwise, Van Geelan and Shah’s essay may look less like speculative fiction than a warning of what’s to come.
Contact CEO Daily via Diane Brady at diane.brady@fortune.com
Top leadership news
‘Betrayal’ in labor market
KPMG Chief Economist Diane Swonk sees “an undercurrent of betrayal” emerging in the U.S. economy as corporate profits soar while employee compensation falls. She cautioned that announcing AI-driven layoffs before productivity gains materialize “could prove penny-wise and pound-foolish.”
Automated Uber rides within 15 years
Meanwhile, Uber CEO Dara Khosrowshahi said on The Diary of a CEO podcast that most of the company’s rides could be automated within 15 years. Delivery and shopping tasks, however, will take longer for machines to master, he noted.
Sam Altman plays defense
At India’s AI Summit, Sam Altman dismissed claims that ChatGPT uses excessive water, saying OpenAI has shifted away from evaporative cooling in its data centers (though more than half of all data centers globally still use the method in some form). He acknowledged AI’s rising electricity demand and urged a rapid buildout of nuclear, wind, and solar power.
The markets
S&P 500 futures are up 0.22% this morning. The last session closed down 1.04%. The STOXX Europe 600 was down 0.09% in early trading. The U.K.’s FTSE 100 was down 0.28% in early trading. Japan’s Nikkei 225 was up 0.87%. China’s CSI 300 was up 1.01%. Hong Kong’s Hang Seng was down 1.82%. South Korea’s KOSPI was up 2.11%. India’s NIFTY 50 was down 0.99%. Bitcoin was down to $63K.
Around the watercooler
Scott Bessent has ’got a feeling’ that $175 billion raised under the IEEPA is lost to the American people for good by Eleanor Pringle
OpenAI changed its mission statement 6 times in 9 years. It finally removed the word “safely” as a core value when it restructured into a for-profit by Catherina Gioino
In less than a year, Trump erased 12 years of solvency for the trust fund that pays for Medicare Part A by Nick Lichtenberg
Crypto VC Framework Ventures to take $45 million stake in Better.com as mortgage issuer plans to launch ’Home Token’ by Ben Weiss
CEO Daily is compiled and edited by Joey Abrams, Claire Zillman and Lee Clifford.
