I do think you should hedge more given the tower of assumptions underneath.

The title of the post is simultaneously very confident ("the market implies" and "but not more"), but also somewhat imprecise ("trillions" and "value"). It was not clear to me that the point you were trying to make was that the number was high.

Your use of "but not more" implies you were also trying to assert the point that it was not that high, but I agree with your point above that the market could be even bigger. If you believe it could be much bigger, that seems inconsistent with the title.

I also think "value" and "revenue" are not equivalent for 2 reasons:

1. Value should factor in the consumer surplus
2. Even if you only look at the producer surplus, then you should look at profit not revenue

Your claim is very strong that “the market implies X”, when I think what you mean is that “the share price is consistent with X”.

There are a lot of assumptions stacked up:

• The share price represents the point at which the marginal buyer and marginal seller transact. If you assume both are rational and fundamental, then this represents the NPV of future cash flows for the marginal buyer / seller. Note this is not the same as the median / mean expectation.
• You can use some other market expectations for discount rates etc. to translate that into some possible forecast of cash flow. If you are of the view that AI will fundamentally change the market economy, this assumption seems flawed.
• The market does not tell you anything about the profile of those cash flows (i.e. all in the short-term vs. spread out over the long-term), so you need to make your own assumption on growth and maturity to get to a cash flow forecast.
• You can use assumptions around financing, taxes, capex, etc. to convert from cash flows into pre-tax profit.
• Then an assumption of margin to convert from pre-tax profit to revenue. This seems very difficult to forecast. Arguably, margin is at least as important as revenue in determining profit.

You cannot derive revenue, or the shape of revenue growth, from a stock price. I think what you mean is consensus forecasts that support the current share price. The title of the article is provably incorrect.

Thanks for sharing. It’s a start, but it’s certainly not a proven Theory of Change. For example, Tetlock himself said that nebulous long-term forecasts are hard to do because there’s no feedback loop. Hence, a prediction market on an existential risk will be inherently flawed.

Preventing catastrophic risks, improving global health and improving animal welfare are goals in themselves. At best, forecasting is a meta topic that supports other goals

Thanks for sharing, but nobody on that thread seems to be able to explain it! Most people there, like here, seem very sceptical

You might be right but just to add a datapoint: I was featured in an article in 2016. I don’t regret it but I was careful about (1) the journalist and (2) what I said on the record.

I think forecasting is attractive to many people in EA like myself because EA skews towards curious people from STEM backgrounds who like games. However, I’m yet to see a robust case for it being an effective use of charitable funds (if there is, please point me to it). I’m worried we are not being objective enough and trying to find the facts that support the conclusion rather than the other way round.

Insolvency happens on an entity by entity level. I don’t know which FTX entity gave money to EA orgs (if anyone knows, please say), and whether it went first via the founders personally. I would have thought it’s possible that FTX full repays its creditors, so there is value in the shares, but then FTX’s investors go after the founders personally and they are declared bankrupt.

I’m hugely in favour of principles first as I think it builds a more healthy community. However, my concern is that if you try too hard to be cause neutral, you end up artificially constrained. For example, Global Heath and Wellbeing is often a good introduction point to the concept of effectiveness. Then once people are focused on maximisation, it’s easier to introduce Animal Welfare and X-Risk.