Lots of the comments here are pointing at details of the markets and whether it’s possible to profit off of knowing that transformative AI is coming. Which is all fine and good, but I think there’s a simple way to look at it that’s very illuminating.
The stock market is good at predicting company success because there are a lot of people trading in it who think hard about which companies will succeed, doing things like writing documents about those companies’ target markets, products, and leadership. Traders who do a good job at this sort of analysis get more funds to trade with, which makes their trading activity have a larger impact on the prices.
Now, when you say that:
the market is decisively rejecting – i.e., putting very low probability on – the development of transformative AI in the very near term, say within the next ten years.
I think what you’re claiming is that market prices are substantially controlled by traders who have a probability like that in their heads. Or traders who are following an algorithm which had a probability like that in the spreadsheet. Or something thing like that. Some sort of serious cognition, serious in the way that traders treat company revenue forecasts.
And I think that this is false. I think their heads don’t contain any probability for transformative AI at all. I think that if you could peer into the internal communications of trading firms, and you went looking for their thoughts about AI timelines affecting interest rates, you wouldn’t find thoughts like that. And if you did find an occasional trader who had such thoughts, and quantified how much impact they would have on the prices if they went all-in on trading based on that theory, you would find their impact was infinitesimal.
Market prices aren’t mystical, they’re aggregations of traders’ cognition. If the cognition isn’t there, then the market price can’t tell you anything. If the cognition is there but it doesn’t control enough of the capital to move the price, then the price can’t tell you anything.
I think this post is a trap for people who think of market prices as a slightly mystical source of information, who don’t have much of a model of what cognition is behind those prices.
Yeah, no, this story is not overall plausible and I would bet at better than 50-50 odds that there’s a major misrepresentation here regarding what happened. Option 1 is that a grant was approved pending due diligence, then pulled during the due diligence process. That would be mildly embarrassing, and would probably imply a grant evaluator somewhere didn’t do their job, but it wouldn’t be the scandal that this purports to be. Option 2 is that the letter of intent is an outright forgery.