Who wants to bet me $25k at 1:7 odds that there won’t be an AI market crash in the next year?
If there turns out not to be an AI crash, you get a 1/(1+7) * $25,000 = $3,125
If there is an AI crash, you transfer $25k to me.
If you believe that AI is going to keep getting more capable, pushing rapid user growth and work automation across sectors, this is near free money. But to be honest, I think there will likely be an AI crash in the next 5 years, and on average expect to profit well from this one-year bet.
If I win, I want to give the $25k to organisers who can act fast to restrict the weakened AI corps in the wake of the crash. So bet me if you’re highly confident that you’ll win or just want to hedge the community against the possibility of a crash.
To make this bet, we need to set the threshold for a market crash. I find it hard to define comprehensively: is a 40% slump in VC investment in AI start-ups a crash? Or a 30% slump in LLM subscriptions? Or GPU data center providers unable to cover debts? Or just a majority vote here that a crash happened? How do we non-ambiguously define it?
Also, I’d need some proof of you having $25k in cash. If you say you have a well-earning job and saved up the money, that might be enough.
Remmelt, if you wish, I’m happy to operationalize a bet. I think you’re wrong.
Why such poor odds?
Frankly, because I’d want to profit from it.
The odds of 1:7 imply a 12.5% chance of a crash, and I think the chance is much higher (elsewhere I posted a guess of 40% 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”).
That percentage of 12.5% is far outside of the consensus on this Metaculus page. Though I notice that their criteria for a “bust or winter” are much stricter than where I’d set the threshold for a crash. Still that makes me wonder whether I should have selected an even lower odd ratio. Regardless, this month I’m prepared to take this bet.