Product Director of 8 years, interests in Capital, Prediction markets, Semiconductors. AMF monthly donor for 8 years.
Cameron Holmes
Regarding the first point about the extent to which we should update timelines based on the fact the bond market is not pricing in short timelines for TAI; my prior is that in general the fixed income (bonds) markets are fairly efficient and are more sophisticated/efficient than equity markets. This leads me to initially believe we likely should update based on this/consider it more strongly than bullish equity sentiment towards some AI themes.
However on the flipside I think the size of this market does mean it can retain inefficiencies around subtle themes for longer. I think of this as a form of Expecting Short Inferential Distances—there are a lot of inferential reasoning steps around TAI, scaling, take-off etc.. which make it slower for conviction to spread when compared to something like demographic shifts which have a much more straightforward causality. This is relevant because to move government bond markets requires people to take this bet with a huge amount of assets as this is a very capital-intensive trade with a lot of exposure to other uncorrelated risks/conflating variable (climate, demographics, geopolitics, populism etc..). The reason I think it may be unlikely that many people are making this bet is related to this:
An analysis of the most capital-efficient way to bet on short AI timelines and the possible expected returns (“the greatest trade of all time”).
I suspect there are far more highly levered bets that market participants with a high-conviction belief in short TAI timelines could take, potentially diluting the impact on lower beta instruments (like bonds). For example I expect even being long fairly broad equity markets might outperform this bet and much more targeted bets (especially if they could be hedged against other risks, bringing them closer to a ‘pure’ TAI bet) could be expected to return many multiples of the short-US30Y trade.
If the amount of money being managed by those with high conviction TAI views is ‘small’ (<<$100bn) then I expect there are many more favourable inefficiencies/price dislocations for them to exploit and not a sufficient mass of ‘smart TAI’ money to spill over into long-dated bonds.
I just find it delightful that that HPMOR is the start of so many people’s EA origin story, partly just as a curiosity as I had an opposite path to so many people (AMF > EA > LW > HPMOR)
Presumably there are many people alive today because of a chain of events started with EY writing a fanfic of all things.
Thank you Jonny, admittedly I only made it to one event but it was my first in person interaction with an EA group and I really enjoyed it and found you very welcoming.
Great post
Regarding the second point about how EAs (or anyone else) might exploit an inefficiency in this space, I think it’s tricky just because the amount of other risks that inform the pricing of long-dated bonds. Many of these (climate, demographics, geopolitics, populism etc..) could wipe out any short (or especially leveraged short) position before TAI is realised.
As noted in my other comment I expect for someone with high-conviction views on short TAI timelines there are bets that are:
Much higher in expected returns
Less capital intensive
Less susceptible to other risks
Examples of these bets are broadly discussed elsewhere but often are related to long/short equity bets on disrupting/disrupted companies and companies part of the supply chain (semiconductors design/fab/tooling, datacentre, data aggregators, communications etc..)
I think perhaps at best short long-dated bonds could form part of a short-timelines TAI bet in order to hedge against long positions elsewhere/maintain neutrality against other factors rather than the core position. It feels likely there are considerably better options for someone taking such a bet (as you allude to in the opportunities for future work)