No.  Let’s say AI is improving very rapidly, and affecting the world more rapidly and more radically than I think is plausible.  Let’s just say.

All of a sudden there are incredible things you can spend your money on.

Since there is (possibly) radical deflation, you might be tempted to just hold all your money and buy nothing.  Pick vegetables from your garden.  But the high marginal utility of the new goods and services will get you to spend, especially since you know that plenitude will bring you, in relative terms, a lower marginal utility for marginal expenditures in the future.

You might even go crazy spending.  If nothing else, buy new and improved vegetable seeds for your garden.  That same example shows that spending is robust to you losing your job, even assuming no reemployment is possible.  In this world, there are significant Pigou effects on wealth.

Fed policy has no problem mattering in this world.  Other people of course will wish to use the new Fed-sprayed liquidity to invest.  They might even invest in AI-related goods and services, not all of which will be controlled by “billionaires.”

Liquidity trap arguments, if they are to work at all, require a pretty miserable environment for investment and also consumption.

Note by the way, that liquidity traps were supposed to apply to currency only!  If you try to apply the concept to money more generally, when most forms of holding money bear interest rates of return, the whole concept collapses.

So there is not an aggregate demand problem in this economy, even if the social situation feels volatile or uncomfortable.  After that, Say’s Law holds.  If AI produces a lot more stuff, income is generated from that and the economy keeps going, whether or not the resulting distribution pleases your sense of morality.  Along the way, prices adjust as need be.  If unemployment rises significantly, prices fall too, all the more.  I am not saying everyone ends up happy here, but you cannot have a) a flood of goods and services, b) billions accruing to the AI owners, without also c) prices are at a level where most people can afford to buy a whole bunch of things.  Otherwise, where do you think all the AI revenue is coming from?  The new output has to go somewhere, and sorry people it is simply not all trapped in currency hoards.  Be just a little Walrasian here, please.  (I would call it Huttian instead.)

Besides, why assume that “the machines” here are reaping all the surplus?  Are they the scarce factor of production?  Maybe it is hard to say in advance, but do not take any particular assumptions for granted here, ask to see them spelt out.  One simple scenario is that the regions with energy and data centres become much wealthier, and people need to move to those areas.  Maybe they do not do this quickly enough, a’la our earlier history with the Rust Belt.  That is a problem worth worrying about, but it is nothing like the recent collapse concerns that have been circulating.

The whole Citrini scenario is incorrect right off the bat.  Very little of it is based on sound macroeconomic reasoning.  See Eli’s very good comments too.  Nicholas also.  Dare I say they should have consulted with the AIs for a bit longer?