I find it slightly strange that EAs aren’t emphasizing semiconductor investments more given our views about AI.
(Maybe this is because of a norm against giving investment advice? This would make sense to me, except that there’s also a cultural norm about criticizing charities that people donate to, and EAs seemed to blow right through that one.)
I commented on this topic last year. Later, I was informed that some people have been thinking about this and acting on it to some extent, but overall my impression is that there’s still a lot of potential value left on the table. I’m really not sure though.
Since I might be wrong and I don’t really know what the situation is with EAs and semiconductor investments, I thought I’d just spell out the basic argument, and see what people say:
Credible models of economic growth predict that, if AI can substitute for human labor, then we should expect the year-over-year world economic growth rate to dramatically accelerate, probably to at least 30% and maybe to rates as high as 300% or 3000%.
This rate of growth should be sustainable for a while before crashing, since physical limits appear to permit far more economic value than we’re currently generating. For example, at our current rate of approximately 5.6 megajoules per dollar, capturing the yearly energy output of the sun would allow us to generate an economy worth $6.8*10^25 dollars, more than 100 billion times the size of our current economy.
If AI drives this economic productivity explosion, it seems likely that the companies manufacturing computer hardware (i.e. semiconductor companies) will benefit greatly in the midst of all of this. Very little of this seems priced in right now, although I admit I haven’t done any rigorous calculations to prove that.
I agree it’s hard to know who will capture most of the value from the AI revolution, but semiconductor companies, and in particular the companies responsible for designing and manufacturing GPUs, seem like a safer bet than almost anyone else.
I agree it’s possible that the existing public companies will be unseated by private competitors and so investing in the public companies risks losing everything, but my understanding is that semiconductor companies have a large moat and are hard to unseat.
I agree it’s possible that the government will nationalize semiconductor production, but they won’t necessarily steal all the profits from investors before doing so.
I agree that EAs should avoid being too heavily invested in one single asset (e.g. crypto) but how much is EA actually invested in semiconductor stocks? Is this actually a concern right now, or is it just a hypothetical concern? Also, investing in Anthropic seems like a riskier bet since it’s less diversified than a broad semiconductor portfolio, and could easily go down in flames.
I agree that AI might hasten the arrival of some sort of post-property-rights system of governance in which investments don’t have any meaning anymore, but I haven’t seen any strong arguments for this. It seems more likely that e.g. tax rates will go way up, but people still own property.
In general, I agree that there are many uncertainties that this question is riding on, but that’s the same thing with any other thing EA does. Any particular donation to AI safety research, for example, is always uncertain and might be a waste of time.
Investing in semiconductor companies plausibly accelerates AI a little bit which is bad to the extent you think acceleration increases x-risk, but if EA gets a huge payout by investing in these companies, then that might cancel out the downsides from accelerating AI?
Another thing I just thought of is that maybe there are good tax reasons to not switch EA investments to semiconductor stocks, which I think would be fair, and I’m not an expert in any of that stuff.
I mostly agree with this (and did also buy some semiconductor stock last winter).
Besides plausibly accelerating AI a bit (which I think is a tiny effect at most unless one plans to invest millions), a possible drawback is motivated reasoning (e.g., one may feel less inclined to think critically of the semi industry, and/or less inclined to favor approaches to AI governance that reduce these companies’ revenue). This may only matter for people who work in AI governance, and especially compute governance.
I find it slightly strange that EAs aren’t emphasizing semiconductor investments more given our views about AI.
(Maybe this is because of a norm against giving investment advice? This would make sense to me, except that there’s also a cultural norm about criticizing charities that people donate to, and EAs seemed to blow right through that one.)
I commented on this topic last year. Later, I was informed that some people have been thinking about this and acting on it to some extent, but overall my impression is that there’s still a lot of potential value left on the table. I’m really not sure though.
Since I might be wrong and I don’t really know what the situation is with EAs and semiconductor investments, I thought I’d just spell out the basic argument, and see what people say:
Credible models of economic growth predict that, if AI can substitute for human labor, then we should expect the year-over-year world economic growth rate to dramatically accelerate, probably to at least 30% and maybe to rates as high as 300% or 3000%.
This rate of growth should be sustainable for a while before crashing, since physical limits appear to permit far more economic value than we’re currently generating. For example, at our current rate of approximately 5.6 megajoules per dollar, capturing the yearly energy output of the sun would allow us to generate an economy worth $6.8*10^25 dollars, more than 100 billion times the size of our current economy.
If AI drives this economic productivity explosion, it seems likely that the companies manufacturing computer hardware (i.e. semiconductor companies) will benefit greatly in the midst of all of this. Very little of this seems priced in right now, although I admit I haven’t done any rigorous calculations to prove that.
I agree it’s hard to know who will capture most of the value from the AI revolution, but semiconductor companies, and in particular the companies responsible for designing and manufacturing GPUs, seem like a safer bet than almost anyone else.
I agree it’s possible that the existing public companies will be unseated by private competitors and so investing in the public companies risks losing everything, but my understanding is that semiconductor companies have a large moat and are hard to unseat.
I agree it’s possible that the government will nationalize semiconductor production, but they won’t necessarily steal all the profits from investors before doing so.
I agree that EAs should avoid being too heavily invested in one single asset (e.g. crypto) but how much is EA actually invested in semiconductor stocks? Is this actually a concern right now, or is it just a hypothetical concern? Also, investing in Anthropic seems like a riskier bet since it’s less diversified than a broad semiconductor portfolio, and could easily go down in flames.
I agree that AI might hasten the arrival of some sort of post-property-rights system of governance in which investments don’t have any meaning anymore, but I haven’t seen any strong arguments for this. It seems more likely that e.g. tax rates will go way up, but people still own property.
In general, I agree that there are many uncertainties that this question is riding on, but that’s the same thing with any other thing EA does. Any particular donation to AI safety research, for example, is always uncertain and might be a waste of time.
Investing in semiconductor companies plausibly accelerates AI a little bit which is bad to the extent you think acceleration increases x-risk, but if EA gets a huge payout by investing in these companies, then that might cancel out the downsides from accelerating AI?
Another thing I just thought of is that maybe there are good tax reasons to not switch EA investments to semiconductor stocks, which I think would be fair, and I’m not an expert in any of that stuff.
I mostly agree with this (and did also buy some semiconductor stock last winter).
Besides plausibly accelerating AI a bit (which I think is a tiny effect at most unless one plans to invest millions), a possible drawback is motivated reasoning (e.g., one may feel less inclined to think critically of the semi industry, and/or less inclined to favor approaches to AI governance that reduce these companies’ revenue). This may only matter for people who work in AI governance, and especially compute governance.