The market makers don’t seem to be talking about it at all, and conversations I have with e.g. commodities traders says the topic doesn’t come up at work. Nowadays they talk about AI, but in terms of its near-term effects on automation, not to figure out if it will respect their property rights or something.
Large public AI companies like NVDA, which I would expect to be priced mostly based on long-run projections of AI usage, have been consistently bid up after earnings, as if the stock market is constantly readjusting their expectations of AGI takeoff by the amount that NVDA is personally earning each quarter rather than using those earnings to inform technical timelines. I think it’s more likely that they’re saying something close to “look! Nvidia’s revenues are rising!” and “wow, Nvidia has grown pretty consistently, we should increase the premium on their call options” and not really much beyond that.
Current NASDAQ futures prices are business as usual. There are only two ways to account for this prices if they are pricing things in; either they thing slow takeoff is extraordinarily (<1%) unlikely to occur before 2030, or extremely unlikely to lead to lots of growth, or both. Either of these seem like strange conclusions to me that would require unusually strong understanding of the tech tree and policy response, but as I mentioned, they’re not even talking about it so how would they know?
“Pricing this in” would require entire nation-states worth of capital. Even if there’s one ten billion dollar hedge fund out there that is considering these issues deeply, it wouldn’t have the power to move markets to where I think they ought to be.
AGI takeoff is completely out of distribution for the Great Financial Machine Learning System, being an event which has never happened before, that would break more invariants about how economies work and grow than any black swan event since the dawn of public stock exchanges. There’s no strong reason to believe, a priori, that hedge funds are selected to account for it in the same way they are selected to correctly predict fed rate adjustments, besides basic reasons like “hedge funds are filled with high IQ people”. A similar, weaker reason explains why it was a good idea to buy put options on the market in February 2020.
why do you think they’re not pricing this in?
The market makers don’t seem to be talking about it at all, and conversations I have with e.g. commodities traders says the topic doesn’t come up at work. Nowadays they talk about AI, but in terms of its near-term effects on automation, not to figure out if it will respect their property rights or something.
Large public AI companies like NVDA, which I would expect to be priced mostly based on long-run projections of AI usage, have been consistently bid up after earnings, as if the stock market is constantly readjusting their expectations of AGI takeoff by the amount that NVDA is personally earning each quarter rather than using those earnings to inform technical timelines. I think it’s more likely that they’re saying something close to “look! Nvidia’s revenues are rising!” and “wow, Nvidia has grown pretty consistently, we should increase the premium on their call options” and not really much beyond that.
Current NASDAQ futures prices are business as usual. There are only two ways to account for this prices if they are pricing things in; either they thing slow takeoff is extraordinarily (<1%) unlikely to occur before 2030, or extremely unlikely to lead to lots of growth, or both. Either of these seem like strange conclusions to me that would require unusually strong understanding of the tech tree and policy response, but as I mentioned, they’re not even talking about it so how would they know?
“Pricing this in” would require entire nation-states worth of capital. Even if there’s one ten billion dollar hedge fund out there that is considering these issues deeply, it wouldn’t have the power to move markets to where I think they ought to be.
AGI takeoff is completely out of distribution for the Great Financial Machine Learning System, being an event which has never happened before, that would break more invariants about how economies work and grow than any black swan event since the dawn of public stock exchanges. There’s no strong reason to believe, a priori, that hedge funds are selected to account for it in the same way they are selected to correctly predict fed rate adjustments, besides basic reasons like “hedge funds are filled with high IQ people”. A similar, weaker reason explains why it was a good idea to buy put options on the market in February 2020.