There's a lot of interest within the EA community in investing in certain securities to benefit when AGI is developed. Which stocks, ETFs, etc. would you invest in and why?
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In general, it's very difficult for stock market investors to make bets related to large shifts in technology because the benefits of such growth are typically concentrated in firms that do not yet exist. Someone who saw the economic importance of operating systems in the 1960s couldn't have capitalized on that foresight because Microsoft and Apple weren't founded until the 1970s.
It's also unclear whether the benefits of AGI would go to companies which create AGI itself, companies which control critical data needed to train AGI, or companies who are well positioned to utilize AGI. For example, you can imagine a world where Google and Microsoft both develop AGIs but make little profit from them because stiff competition keeps the price of using an AGI extremely low.
A good strategy may be to invest in all marketable securities (with an ETF like VT and an equivalent bond ETF). You'd be betting that any company might experience rapid growth due to AGI.
Another strategy might be to tilt your portfolio based on regions which seem to be hubs for AI innovation. For example, since most AI innovation seems to be concentrated in the US right now, you could choose a US total market ETF such as VTI. I believe such an investment decision would be a mistake, however. Although US firms are developing AI rapidly, international firms seem to be equally well positioned to utilize AGI.
In the short term, some companies may be well positioned to capitalize on the AI boom. Microsoft comes to mind, as do manufacturers of data center equipment (chips, cooling equipment, etc.). However, these short-term possibilities are already priced into those securities. In the long run, however, AGI could easily destroy the strong market positions of these companies - why pay for Microsoft Word when you can simply have an AGI develop a new word processor just for you? Why by a chip fab system from ASML when an AGI can design you a new, better semiconductor platform?
Edit: clarifying what I think is priced into the market right now.
these possibilities are already priced into those securities
This post argues that markets do not seem to be expecting an AGI explosion (which, of course, could be interpreted as evidence that such an explosion is unlikely to occur and the market is correct to not price the possibility in).
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In that paragraph I meant to refer only to the "AI boom" - essentially all the recent LLM stuff. In general I don't think it matters to the investor whether the possibility of AGI is accounted for in the markets because the benefits of such growth would likely be concentrated in firms that do not yet exist.
The post you linked to also discusses the possibility of trying to use incorrectly priced debt instruments to take capitalize on the potential development of AGI. However, such a strategy is not realizable in practice because you'd need to find a counter-party/lender. At best, you'd end up with a callable debt - not very useful over an extended time horizon.
If you haven't seen, a long analysis of this:
- AGI and the EMH: markets are not expecting aligned or unaligned AI in the next 30 years
- TLDR: bet on real rates rising
- Against using stock prices to forecast AI timelines
- Some cautionary points ¯\_(ツ)_/¯
Tricky question. I generally agree with Erin's reply.
A possibly clever but risky strategy might be to think about where an AI would get its data from, and invest in companies and protocols that are well-positioned as automated, high-speed feeds of reliable data. Crypto oracle protocols such as Chainlink are aiming to do that for smart contracts, but they could also do it for AIs. The difficult issue is how secure any such data feed services are to cyberattacks or game-theoretic/consensus protocol attacks on their data integrity.
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I believe this section of this post by Zvi addresses your concern about this:
Q: Should I invest in AI companies?
Short Answer: Not if the company could plausibly be funding constrained.
Long Answer: Investing in AI companies, by default, gives them more funding and more ambition, and thus accelerates AI. That’s bad, and a good reason not to invest in them. Any AI company that is a good investment and maximizing profits is not something to be encouraged. If you were purely profit maximizing and were dismissive of the risks from AI, that would be different, but these questions assume a different perspective. The exception is that the Big Tech companies (Google, Amazon, Apple, Microsoft, although importantly not Facebook, seriously f*** Facebook) have essentially unlimited cash, and their funding situation changes little (if at all) based on their stock price.
The post was published on 1 March 2023, but it seems like the entire tech sector has been more cash constrained recently, what with the industry-wide layoffs.
I think this question is worth discussing, but I downvoted your comment for suggesting that my post does not belong on the EA Forum.
I imagine that at any point in time either big tech or AI safety orgs/funders are cash-constrained. Or maybe that at any point in time we’ll have an estimate which party will be more cash-constrained during the crunch time.
When the estimate shows that safety efforts will be more cash-constrained, then it stands to reason that we should mission-hedge by investing (in some smart fashion) in big tech stock. If the estimate shows that big tech will be more cash-constrained (e.g., because the AI safety bottlenecks are elsewhere entirely), then it stands to reason that we should perhaps even divest from big tech stock, even at a loss.
But if we’re in a situation where it doesn’t seem sensible to divest, then investing is probably also not so bad at the current margin.
I’m leaning towards thinking that investing is not so bad at the current margin, but I was surprised by the magnitude of the effect of divesting according to Paul Christiano’s analysis, so I could easily be wrong about that.
I believe this paper gives a clear picture of why it would be advantageous for a charity to invest in the very companies they are trying to stop.
In short, there is not really any evidence that investing in a publicly traded stock materially effects the underlying company in any way. However, investing in the stock of a company you are opposed to provides a hedge against that company's success.
Buying a publicly traded company's shares marginally increases their price and the price of the company's corporate bonds in expectation. In expectation, this allows the company to raise new capital more easily by issuing new shares and bonds at better prices, lower interest rates or while diluting existing shareholders else less.
Buying a publicly traded company's shares marginally increases their price and the price of the company's corporate bonds in expectation.
I don't think this is true and I as I understand it this statement is controversial among economists.
Here's how I think about asset pricing. For an individual stock, there are typically large pools of informed traders (e.g., fund managers) who control sizeable portions of all assets. They each have a "target price" for a stock - the price they think reflects the true value of a stock. They will buy the stock if it falls below their target and sell it if it rises above. Collectively these funds have trillions in capital which they can shift around to buy up stock they think is undervalued. Their demand is so enormous and elastic that you can not apply "supply and demand" thinking to stocks. The price of a stock is set by how large institutions value it, not by trading activity.
Some have argued that large scale shifts towards passive investing have reduced market elasticity. However, if this reduction of elasticity has occurred, it has been because of tens of trillions of dollars of AUM shifting towards index strategies - it is not the kind of thing that even the largest charity could impact.
For counterexamples at the extremes, we have retail-driven stocks like GameStop, AMC and BBBY, but these had small market caps. I'd also guess Tesla stock prices have been affected by retail investors.
Institutions' price targets could be affected by retail investment, and not all strategies are based exclusively on price targets, e.g. momentum investing. Retail investment interest could be used a measure of sentiment and is evidence for future revenues, especially for companies whose revenues primarily come from consumer sales rather than business-to-business sales. For example, Tesla retail investment levels should be evidence for future Tesla vehicle sales.
Over 40% of Tesla shares are owned by retail investors compared to less than 25% of Microsoft shares and around 30% of NVIDIA and Google shares, so I doubt that the difference in percentages is mostly explainable by passive investing. I'd guess >10% of Tesla shares are owned non-passively by retail investors.
EDIT: The Tesla stock price also seemed to be affected by the first stock split, another reason to believe it is driven by retail investment or at least strategies not based exclusively on price targets. According to your model of markets, stock splits in general seem irrational for companies to do and shouldn't really affect prices, but I think the point is to increase demand for the stock, by making it more affordable for retail investors (or giving that perception; maybe it's mostly just buying positive sentiment). NVIDIA and Google have done stock splits in the past few years, too. EDIT2: It seems there are other possibly more important reasons, e.g. "The most common ones are to achieve an optimal price range for liquidity, to achieve an optimal tick size and to signal managements’ confidence in the future stock price." http://erepository.uonbi.ac.ke/handle/11295/10052
Maybe all of this is less applicable to the companies contributing most to advancing AI, though. But either way, I'd expect our impact on company capital and work (e.g. advancing AI capabilities) to be pretty negligible in expectation anyway, so I don't think EAs or EA orgs should hold back from investing because of such concerns. We'd still be a tiny share of non-passive retail investment.
There's no good evidence that investing in a publicly traded company helps it at all. You are buying shares from other shareholders, not from the company itself, and the company does not care who hold's its shares. Investing in a venture capital deal is a different story. It would definitely not be advisable for a charity to provide VC funding for a company opposed to it's charitable mission because they could plausibly expand the total available funding for the company.
Curated and popular this week
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Note: I am not a malaria expert. This is my best-faith attempt at answering a question that was bothering me, but this field is a large and complex field, and I’ve almost certainly misunderstood something somewhere along the way.
Summary
While the world made incredible progress in reducing malaria cases from 2000 to 2015, the past 10 years have seen malaria cases stop declining and start rising. I investigated potential reasons behind this increase through reading the existing literature and looking at publicly available data, and I identified three key factors explaining the rise:
1. Population Growth: Africa's population has increased by approximately 75% since 2000. This alone explains most of the increase in absolute case numbers, while cases per capita have remained relatively flat since 2015.
2. Stagnant Funding: After rapid growth starting in 2000, funding for malaria prevention plateaued around 2010.
3. Insecticide Resistance: Mosquitoes have become increasingly resistant to the insecticides used in bednets over the past 20 years. This has made older models of bednets less effective, although they still have some effect. Newer models of bednets developed in response to insecticide resistance are more effective but still not widely deployed.
I very crudely estimate that without any of these factors, there would be 55% fewer malaria cases in the world than what we see today. I think all three of these factors are roughly equally important in explaining the difference.
Alternative explanations like removal of PFAS, climate change, or invasive mosquito species don't appear to be major contributors.
Overall this investigation made me more convinced that bednets are an effective global health intervention.
Introduction
In 2015, malaria rates were down, and EAs were celebrating. Giving What We Can posted this incredible gif showing the decrease in malaria cases across Africa since 2000:
Giving What We Can said that
> The reduction in malaria has be
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Cross-posted from my blog.
Contrary to my carefully crafted brand as a weak nerd, I go to a local CrossFit gym a few times a week. Every year, the gym raises funds for a scholarship for teens from lower-income families to attend their summer camp program. I don’t know how many Crossfit-interested low-income teens there are in my small town, but I’ll guess there are perhaps 2 of them who would benefit from the scholarship. After all, CrossFit is pretty niche, and the town is small.
Helping youngsters get swole in the Pacific Northwest is not exactly as cost-effective as preventing malaria in Malawi. But I notice I feel drawn to supporting the scholarship anyway. Every time it pops in my head I think, “My money could fully solve this problem”. The camp only costs a few hundred dollars per kid and if there are just 2 kids who need support, I could give $500 and there would no longer be teenagers in my town who want to go to a CrossFit summer camp but can’t. Thanks to me, the hero, this problem would be entirely solved. 100%.
That is not how most nonprofit work feels to me.
You are only ever making small dents in important problems
I want to work on big problems. Global poverty. Malaria. Everyone not suddenly dying. But if I’m honest, what I really want is to solve those problems. Me, personally, solve them. This is a continued source of frustration and sadness because I absolutely cannot solve those problems.
Consider what else my $500 CrossFit scholarship might do:
* I want to save lives, and USAID suddenly stops giving $7 billion a year to PEPFAR. So I give $500 to the Rapid Response Fund. My donation solves 0.000001% of the problem and I feel like I have failed.
* I want to solve climate change, and getting to net zero will require stopping or removing emissions of 1,500 billion tons of carbon dioxide. I give $500 to a policy nonprofit that reduces emissions, in expectation, by 50 tons. My donation solves 0.000000003% of the problem and I feel like I have f
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> How the dismal science can help us end the dismal treatment of farm animals
By Martin Gould
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Note: This post was crossposted from the Open Philanthropy Farm Animal Welfare Research Newsletter by the Forum team, with the author's permission. The author may not see or respond to comments on this post.
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This year we’ll be sharing a few notes from my colleagues on their areas of expertise. The first is from Martin. I’ll be back next month. - Lewis
In 2024, Denmark announced plans to introduce the world’s first carbon tax on cow, sheep, and pig farming. Climate advocates celebrated, but animal advocates should be much more cautious. When Denmark’s Aarhus municipality tested a similar tax in 2022, beef purchases dropped by 40% while demand for chicken and pork increased.
Beef is the most emissions-intensive meat, so carbon taxes hit it hardest — and Denmark’s policies don’t even cover chicken or fish. When the price of beef rises, consumers mostly shift to other meats like chicken. And replacing beef with chicken means more animals suffer in worse conditions — about 190 chickens are needed to match the meat from one cow, and chickens are raised in much worse conditions.
It may be possible to design carbon taxes which avoid this outcome; a recent paper argues that a broad carbon tax would reduce all meat production (although it omits impacts on egg or dairy production). But with cows ten times more emissions-intensive than chicken per kilogram of meat, other governments may follow Denmark’s lead — focusing taxes on the highest emitters while ignoring the welfare implications.
Beef is easily the most emissions-intensive meat, but also requires the fewest animals for a given amount. The graph shows climate emissions per tonne of meat on the right-hand side, and the number of animals needed to produce a kilogram of meat on the left. The fish “lives lost” number varies significantly by
