Maybe I’m banking too much on some people in the AI Safety community keep thinking that AI “progress” will continue as a rapid upward curve :)
Elsewhere I posted a guess of 40% chance of an AI market crash for this year, though I did not have precise crash criteria in mind there, and would lower the percentage once it’s judged by a few measures, rather than my sense of “that looks like a crash”.
For sure! Proceeds go to organisers who can act to legitimately restrict the weakened AI companies.
(Note that with a crash I don’t just mean some large reduction in the stock prices of tech companies that have been ‘leading’ on AI. I mean a broad-based reduction in the investments and/or customer spending going into the AI companies.)
Maybe you should try to define an AI market crash in such a way it’s mostly limited to AI market crashes caused by the economics of AI (rather than a general market crash).
E.g. compare the spending/valuations/investments in AI with spending/valuations/investments elsewhere.
I want to take you up on measuring actual inflows of capital into the large-AI-model development companies. Rather than e.g. measuring the prices of stocks in companies leading on development – where declines may not much reflect an actual reduction in investment and spending on AI products.
Consumers and enterprises cutting back on their subscriptions and private investors cutting back on their investment offers and/or cancelling previous offers – those seem reliable indicators of an actual crash.
It’s plausible that a general market crash feeds into, and is reflective of, worsening economics of the AI companies. So it seems hard to decouple causation there. And, I’d still call it an AI market crash even if investment/valuations/investments are going down to a similar extent in other industries. So I would not try to control for other market declines happening around the same time, but your suggested indicators make sense!
I disagree that it’s hard to decouple causation: if the AI market and general market crashes by the same amount next year, I’ll feel confident that it’s the general market causing the AI market to crash, and not the other way around.
Yearly AI spendings have been estimated to be at least 200 billion and maybe 600+ billion, but the world GDP is 100,000 billion (25,000 billion in the US). AI is still a very small player in the economy. (Even if you estimate it by expenditures rather than revenue)
That said, if the AI market crashes much more than the general market, it could be the economics of AI causing them to crash, or it could be the general market slowing a little bit triggering AI to crash by a lot. But either way, you deserve to win the bet.
If your bet is that something special about the economics of AI will cause it to crash, maybe your bet should be changed to this?
If AI crashes but the general market does not, you win money
If AI doesn’t crash, you lose money
If both AI and the general market crashes, the bet resolves as N/A
PS: I don’t exactly have $25k to bet, and I’ve said elsewhere I do believe there’s a big chance that AI spending will decrease.
Edit: Another thought is that changes in the amount of investment may swing further than changes in the value...? I’m no economist but from my experience, when the value of housing goes down a little, housing sales drop by a ton. (This could be a bad analogy since homebuyers aren’t all investors)[1]
If your bet is that something special about the economics of AI will cause it to crash, maybe your bet should be changed to this?
What’s relevant for me is that there is an AI market crash, such that AI corporations have weakened and we in turn have more leeway to restrict their reckless activities. Practically, I don’t mind if that’s actually the result of a wider failing economy – I mentioned a US recession as a causal factor here.
Having said that, it would be easier to restrict AI corp activities when there is not a general market crash at the same time (since the latter would make it harder to fund organisers as well as for working citizens to mobilise).
PS: I don’t exactly have $25k to bet, and I’ve said elsewhere I do believe there’s a big chance that AI spending will decrease.
Understood! And I appreciate you discussing thoughts with me here.
Another thought is that changes in the amount of investment may swing further than changes in the value...?
Interesting point! That feels right, but I lack experience/clarity about how investments work here.
Maybe I’m banking too much on some people in the AI Safety community keep thinking that AI “progress” will continue as a rapid upward curve :)
Elsewhere I posted a guess of 40% chance of an AI market crash for this year, though I did not have precise crash criteria in mind there, and would lower the percentage once it’s judged by a few measures, rather than my sense of “that looks like a crash”.
If you think there’s a 40% chance of a crash, then that’s quite the vig you’re allocating yourself on this bet at 1:7.
For sure! Proceeds go to organisers who can act to legitimately restrict the weakened AI companies.
(Note that with a crash I don’t just mean some large reduction in the stock prices of tech companies that have been ‘leading’ on AI. I mean a broad-based reduction in the investments and/or customer spending going into the AI companies.)
Maybe you should try to define an AI market crash in such a way it’s mostly limited to AI market crashes caused by the economics of AI (rather than a general market crash).
E.g. compare the spending/valuations/investments in AI with spending/valuations/investments elsewhere.
That’s a good distinction.
I want to take you up on measuring actual inflows of capital into the large-AI-model development companies. Rather than e.g. measuring the prices of stocks in companies leading on development – where declines may not much reflect an actual reduction in investment and spending on AI products.
Consumers and enterprises cutting back on their subscriptions and private investors cutting back on their investment offers and/or cancelling previous offers – those seem reliable indicators of an actual crash.
It’s plausible that a general market crash feeds into, and is reflective of, worsening economics of the AI companies. So it seems hard to decouple causation there. And, I’d still call it an AI market crash even if investment/valuations/investments are going down to a similar extent in other industries. So I would not try to control for other market declines happening around the same time, but your suggested indicators make sense!
I disagree that it’s hard to decouple causation: if the AI market and general market crashes by the same amount next year, I’ll feel confident that it’s the general market causing the AI market to crash, and not the other way around.
Yearly AI spendings have been estimated to be at least 200 billion and maybe 600+ billion, but the world GDP is 100,000 billion (25,000 billion in the US). AI is still a very small player in the economy. (Even if you estimate it by expenditures rather than revenue)
That said, if the AI market crashes much more than the general market, it could be the economics of AI causing them to crash, or it could be the general market slowing a little bit triggering AI to crash by a lot. But either way, you deserve to win the bet.
If your bet is that something special about the economics of AI will cause it to crash, maybe your bet should be changed to this?
If AI crashes but the general market does not, you win money
If AI doesn’t crash, you lose money
If both AI and the general market crashes, the bet resolves as N/A
PS: I don’t exactly have $25k to bet, and I’ve said elsewhere I do believe there’s a big chance that AI spending will decrease.
Edit: Another thought is that changes in the amount of investment may swing further than changes in the value...? I’m no economist but from my experience, when the value of housing goes down a little, housing sales drop by a ton. (This could be a bad analogy since homebuyers aren’t all investors)[1]
Though Google Deep Research agrees that this also occurs for AI companies
What’s relevant for me is that there is an AI market crash, such that AI corporations have weakened and we in turn have more leeway to restrict their reckless activities. Practically, I don’t mind if that’s actually the result of a wider failing economy – I mentioned a US recession as a causal factor here.
Having said that, it would be easier to restrict AI corp activities when there is not a general market crash at the same time (since the latter would make it harder to fund organisers as well as for working citizens to mobilise).
Understood! And I appreciate you discussing thoughts with me here.
Interesting point! That feels right, but I lack experience/clarity about how investments work here.
Oh yeah I forgot about that, the bet is about the strategic implications of an AI market crash, not proving your opinion on AI economics.
Oops.