Banks Bet on 'AI Cannibalization' as Thin Holiday Trading Masks Real Inflation Data
While U.S. markets stayed quiet for Presidents’ Day, big bank trading desks were busy pitching a new kind of gamble: 'AI cannibalization.' The narrative might call recent inflation 'cool,' but that's a stretch when you look at February’s stubborn CPI figures—a reality that's likely to mess with the Fed's rate-cut schedule. Now, Wall Street is aggressively pushing specialized products designed to profit by betting against software and media firms they've deemed obsolete. It’s a calculated move to monetize the decline of entire service sectors, and we’re digging into the opaque math they're using to pick their targets.
Big banks are taking advantage of a quiet holiday market to push 'AI cannibalization' products that bet on the collapse of traditional software and media companies.
People are calling the recent inflation data 'cool,' but let’s be real: February’s CPI was hotter than most non-partisan analysts expected. It’s creating a major friction point for the Fed and their supposed plan to cut rates by July. During the low-volume vacuum of the February 16 market holiday, European indices like the Stoxx 600 managed some marginal 0.4% gains. But don’t mistake that for genuine economic optimism. It was mostly just bank shares bouncing back after they’d spooked the market with their own warnings about AI-driven volatility.
The big players are carefully controlling this narrative. Take Goldman Sachs. They recently launched an 'AI adoption basket,' but it isn't just a way to ride the tech wave. It’s a two-sided tool. It allows investors to actively short software and business services firms that the bank has branded as 'AI losers.' By labeling these companies this way, banks are basically creating a self-fulfilling prophecy—cranking up market pressure on specific stocks while they collect the fees to manage the fallout.
“Goldman’s new basket doesn't just track AI growth—it actively bets on the failure of firms labeled as 'replaceable.'”
Genuine accuracy in financial reporting is getting lost in all this noise. You might have seen claims in niche media that gold is hitting $5,000 an ounce, but that’s just flat-out false; spot prices aren't even close. That kind of hyperbole is just a distraction from the tactical caution coming out of JPMorgan. Mislav Matejka’s team is already signaling a retreat from companies at risk of 'cannibalizationLoaded Language.' It’s the perfect institutional cover for aggressive short-selling against traditional media and service providers.
For the average person, this 'basket' strategy looks like a dangerous move toward market consolidation. When banks start picking winners and losers based on their own proprietary AI metrics, they end up with a terrifying amount of control over who gets to access capital. JPMorgan’s Nataliia Lipikhina is still projecting 13% growth to keep the S&P 500 outlook 'positive,' but that growth is getting more and more concentrated in a tiny handful of tech giants. It leaves the broader workforce—and the rest of the economy—in a very vulnerable spot.
The kicker is that nobody actually knows how Goldman or JPMorgan decide which workflows are 'replaceable.' Their models are black boxes. A company could see its valuation tank because of an internal bank algorithm, regardless of its actual operational health. As the Fed minutes release on Wednesday approaches, the market is bracing for a reality check. We're about to see what happens when this holiday speculation meets the cold reality of a high-interest-rate environment.
Summary
While U.S. markets stayed quiet for Presidents’ Day, big bank trading desks were busy pitching a new kind of gamble: 'AI cannibalization.' The narrative might call recent inflation 'cool,' but that's a stretch when you look at February’s stubborn CPI figures—a reality that's likely to mess with the Fed's rate-cut schedule. Now, Wall Street is aggressively pushing specialized products designed to profit by betting against software and media firms they've deemed obsolete. It’s a calculated move to monetize the decline of entire service sectors, and we’re digging into the opaque math they're using to pick their targets.
⚡ Key Facts
- US markets (NYSE and Nasdaq) were closed on Monday, February 16, 2026, for Presidents' Day.
- US stock-index futures and European markets (Stoxx 600) saw modest gains during the holiday session.
- Mainland China and other Asian markets were closed or saw subdued trading due to Lunar New Year holidays.
Banks Bet on 'AI Cannibalization' as Thin Holiday Trading Masks Real Inflation Data
Network of Influence
- Institutional investors like Goldman Sachs and JPMorgan whose strategies and 'baskets' are being promoted.
- Short-sellers targeting software and media firms mentioned as 'AI losers'.
- ZeroHedge, which benefits from sensationalist framing of economic data to drive traffic.
- The article mentions gold dipping below $5,000 an ounce, whereas the actual spot price of gold at the time was significantly lower (near $2,000), making the figure highly misleading or a typo.
- The description of Friday's CPI as 'cool' ignores that the February 2024 CPI report was actually widely considered 'hotter' than expected by most analysts, causing initial market volatility.
- It focuses on the upside of AI for certain stocks while emphasizing the 'cannibalization' of others without explaining the methodology of the 'baskets' mentioned.
The article frames market movements as a binary struggle between AI 'winners' and 'losers' while using selective adjectives to interpret economic data in a way that suggests inevitable Fed intervention.