I find it hard to believe that the number of traders who have considered crazy future AI scenarios is negligible. New AI models, semiconductor supply chains, etc. have gotten lots of media and intellectual attention recently. Arguments about transformative AGI are public. Many people have incentives to look into them and think about their implications.
I don’t think this post is decisive evidence against short timelines. But neither do I think it’s a “trap” that relies on fully swallowing EMH. I think there’re deeper issues to unpack here about why much of the world doesn’t seem to put much weight on AGI coming any time soon.
Just a note on Jane Street in particular—nobody at Jane Street is making a potentially multi year bet on interest rates with Jane Street money. That’s simply not in the category of things that Jane Street trades. If someone at Jane Street wanted to make betting on this a significant part of what they do, they’d have to leave and go elsewhere and find someone to give them at least hundreds of millions of dollars to make the bet.
Yeah, I’m also similarly sceptical that a highly publicised/discussed portion of one of the most hyped industries — one that borders on a buzzword at times — has not captured the attention or consideration of the market. Seems hard to imagine given the remarkably salient progress we’ve seen in 2022.
It’s unclear to me that just because the number/liquidity of traders “in the know” is not very small (e.g., it is more than 0.1% of capital) this leads to the market correcting itself. At least, I have some reservations about what I interpret to be the causal process. Suppose that some set of early investors correctly think that ~3% of investors will adopt their own reasoning and engage in similar actions (e.g., “shorting” the long-term bond market) about 6 years before AGI.
But despite all of their reasoning, a very large portion of capital-weighted investors still don’t believe (A) the whole AGI argument, or (B) that there’s much worth doing once they do believe the whole AGI argument (e.g., “well, I guess I should just try not to die before AGI and enjoy my last normal years with my family/friends”).
I see a few potential problems, but am not sure about enough details to know whether the market would suffer from these problems:
It seems plausible that large institutional investors will just balance against any large uptick early on, preventing investors from getting much of any profits in the first 10 or so years (leaving only 5-ish years for profits to start accumulating (albeit without considering discount rates));
Even once the potential for profit opens up or even if the previous point doesn’t apply very strongly, some investors might eventually think they’ll be left “holding the bag” if they ever run into a multi-year plateau in beliefs/capital movement. This could be a scenario where most of the “AGI-open-minded” investors have been tapped, but most other people in society are still skeptical (I.e., it isn’t a smooth distribution of open-mindedness). Short-term profit relies on the rates increasing after you go short, but if you don’t expect the rates to increase then you won’t enter the market and adjust the prices. But the expectation that the person after you might also have this reasoning in its recursive form disincentivizes you from entering, creating a cascading effect.
“Well, I’ll profit eventually, even if it takes 10 years of waiting”—not necessarily, or at that point you may not really enjoy the profits, as it may be “I have 8-figure assets but 3 years left of (normal) life.” I’m not confident that this is a sufficiently appealing offer to the people who could take you up on it and move the market.
I find it hard to believe that the number of traders who have considered crazy future AI scenarios is negligible. New AI models, semiconductor supply chains, etc. have gotten lots of media and intellectual attention recently. Arguments about transformative AGI are public. Many people have incentives to look into them and think about their implications.
I don’t think this post is decisive evidence against short timelines. But neither do I think it’s a “trap” that relies on fully swallowing EMH. I think there’re deeper issues to unpack here about why much of the world doesn’t seem to put much weight on AGI coming any time soon.
Plenty of people at Jane Street that read LessWrong
Just a note on Jane Street in particular—nobody at Jane Street is making a potentially multi year bet on interest rates with Jane Street money. That’s simply not in the category of things that Jane Street trades. If someone at Jane Street wanted to make betting on this a significant part of what they do, they’d have to leave and go elsewhere and find someone to give them at least hundreds of millions of dollars to make the bet.
Jane street even hosted a foom debate between between Hanson and yudkowsky iirc.
(I don’t think this is substantial evidence on the validity of original post)
Yeah, I’m also similarly sceptical that a highly publicised/discussed portion of one of the most hyped industries — one that borders on a buzzword at times — has not captured the attention or consideration of the market. Seems hard to imagine given the remarkably salient progress we’ve seen in 2022.
Thanks for this—I think you put really nicely the interpretation that we also are pushing for.
It’s unclear to me that just because the number/liquidity of traders “in the know” is not very small (e.g., it is more than 0.1% of capital) this leads to the market correcting itself. At least, I have some reservations about what I interpret to be the causal process. Suppose that some set of early investors correctly think that ~3% of investors will adopt their own reasoning and engage in similar actions (e.g., “shorting” the long-term bond market) about 6 years before AGI.
But despite all of their reasoning, a very large portion of capital-weighted investors still don’t believe (A) the whole AGI argument, or (B) that there’s much worth doing once they do believe the whole AGI argument (e.g., “well, I guess I should just try not to die before AGI and enjoy my last normal years with my family/friends”).
I see a few potential problems, but am not sure about enough details to know whether the market would suffer from these problems:
It seems plausible that large institutional investors will just balance against any large uptick early on, preventing investors from getting much of any profits in the first 10 or so years (leaving only 5-ish years for profits to start accumulating (albeit without considering discount rates));
Even once the potential for profit opens up or even if the previous point doesn’t apply very strongly, some investors might eventually think they’ll be left “holding the bag” if they ever run into a multi-year plateau in beliefs/capital movement. This could be a scenario where most of the “AGI-open-minded” investors have been tapped, but most other people in society are still skeptical (I.e., it isn’t a smooth distribution of open-mindedness). Short-term profit relies on the rates increasing after you go short, but if you don’t expect the rates to increase then you won’t enter the market and adjust the prices. But the expectation that the person after you might also have this reasoning in its recursive form disincentivizes you from entering, creating a cascading effect.
“Well, I’ll profit eventually, even if it takes 10 years of waiting”—not necessarily, or at that point you may not really enjoy the profits, as it may be “I have 8-figure assets but 3 years left of (normal) life.” I’m not confident that this is a sufficiently appealing offer to the people who could take you up on it and move the market.