I’m confused how the following scenario is consistent with meeting the resolution criteria. The resolution criteria imply at least 50% decrease in AI company revenues:
Remmelt thinks there will likely be a crash by 2029, since AI companies are burning too much cash on data centers to run products undergoing commodification. He thinks it’s most plausible though that the crash happens on the investment side, and that model subscription revenues could end up being mostly maintained.
It was difficult to come up with operationalizations for investment metrics. Remmelt wanted things like AI & ML VC deal activity being <30% and Anthropic valuation <$30B. I wanted things like % of YC startups being AI-related and didn’t want some large investment round in SpaceX or Stripe dominate funds raised.
like AI & ML VC deal activity being <30% and Anthropic valuation <$30B
My preference was for the former metric (based on AI PitchBook-NVCA Venture Monitor), and another metric based on some threshold for the absolute amount Anthropic or OpenAI got in investments in a next round (which Marcus reasonably pointed out could be triggered if the company just decided to do a some extra top-up round).
I was okay with using Marcus’ Anthropic valuation metric with the threshold set higher, and combined with another possible metric. My worry was that Anthropic execs would not allow their valuation to be lowered unless they were absolutely forced to offer shares at a lower price; a bit like homeowners holding on to their house during a downturn unless their mortgage forces them to sell.
I kinda liked the YCombinator option in principle, but I guessed that applicants for the summer 2025 program would already start to get selected around now, so that would not pick up on a later crash. Also, YC feels like the center of the AI hype to me, so I worried that they’d be last to give way (Marcus thought staff have their hand on the pulse and could change decisions fast, and therefore that made YC more of a leading indicator).
Marcus and I did a lot of back and forth on potential criteria. I started by suggesting metrics that capture a decline in investments into AI companies. Marcus though was reasonably trying to avoid things that can be interest rate/​tariff/​broad market driven.
So the criteria we have here are a result of compromise.
The revenue criteria are rather indirect for capturing my view on things. I think if OpenAI and Anthropic each continue to make $5+ billion yearly losses (along with losses by other model developers) that would result in investors declining to invest, which in turn would lead to reduction in investments into AI data centers (and a corresponding reduction of Nvidia’s revenues). I also think that OpenAI and Anthropic are facing competition with cheaper/​free models that for users often function ‘good enough’, and that particularly during a larger US recession, people will be motivated to cancel their ‘luxury’ subscriptions. Though people can get locked into using personalised chatbots.
I did ask for high betting odds, so there’s a trade-off here!
I’m confused how the following scenario is consistent with meeting the resolution criteria. The resolution criteria imply at least 50% decrease in AI company revenues:
Remmelt thinks there will likely be a crash by 2029, since AI companies are burning too much cash on data centers to run products undergoing commodification. He thinks it’s most plausible though that the crash happens on the investment side, and that model subscription revenues could end up being mostly maintained.
It was difficult to come up with operationalizations for investment metrics. Remmelt wanted things like AI & ML VC deal activity being <30% and Anthropic valuation <$30B. I wanted things like % of YC startups being AI-related and didn’t want some large investment round in SpaceX or Stripe dominate funds raised.
My preference was for the former metric (based on AI PitchBook-NVCA Venture Monitor), and another metric based on some threshold for the absolute amount Anthropic or OpenAI got in investments in a next round (which Marcus reasonably pointed out could be triggered if the company just decided to do a some extra top-up round).
I was okay with using Marcus’ Anthropic valuation metric with the threshold set higher, and combined with another possible metric. My worry was that Anthropic execs would not allow their valuation to be lowered unless they were absolutely forced to offer shares at a lower price; a bit like homeowners holding on to their house during a downturn unless their mortgage forces them to sell.
I kinda liked the YCombinator option in principle, but I guessed that applicants for the summer 2025 program would already start to get selected around now, so that would not pick up on a later crash. Also, YC feels like the center of the AI hype to me, so I worried that they’d be last to give way (Marcus thought staff have their hand on the pulse and could change decisions fast, and therefore that made YC more of a leading indicator).
Good question.
Marcus and I did a lot of back and forth on potential criteria. I started by suggesting metrics that capture a decline in investments into AI companies. Marcus though was reasonably trying to avoid things that can be interest rate/​tariff/​broad market driven.
So the criteria we have here are a result of compromise.
The revenue criteria are rather indirect for capturing my view on things. I think if OpenAI and Anthropic each continue to make $5+ billion yearly losses (along with losses by other model developers) that would result in investors declining to invest, which in turn would lead to reduction in investments into AI data centers (and a corresponding reduction of Nvidia’s revenues). I also think that OpenAI and Anthropic are facing competition with cheaper/​free models that for users often function ‘good enough’, and that particularly during a larger US recession, people will be motivated to cancel their ‘luxury’ subscriptions. Though people can get locked into using personalised chatbots.
I did ask for high betting odds, so there’s a trade-off here!