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Erin

214 karmaJoined Jan 2023

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Erin
· 9mo ago · 1m read

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A small exercise to inspire empathy/gratitude for people who grew up with access to healthcare:

If you'd lived 150 years ago, what might you have died of as a child?

I got pneumonia when I was four and it probably would have killed me without modern medicine. 

How many submissions do you think the Open Philanthropy AI Worldviews contest received? I see 17 posted publicly here, which seems really low to me.

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.

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.

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.

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.

Answer by ErinApr 10, 202319
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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.

I just want to shout out and say that, although my only interaction with the series has been through reading the posts, it has had a big impact for me and my workplace. Several coworkers and I now regularly use Excalidraw and Guesstimate. This has shaved about ~1 week off of a large project. Just napkin math here but we estimate our project will save 50 lives/week with a 1 in 10 chance of success. So by those numbers I'd say you saved about 5 lives with this project. Anyway, just napkin math, but I just wanted to say thank you!

Is it really true that the assembly line made us all a lot richer? The conventional wisdom is that a lot of people became poorer, especially in the short term (because trades/artisan jobs went away). Why shouldn't we expect the same thing from AI?

Edit: I bring this up because I think most people are concerned about the potential for a huge spike in inequality/unemployment.

Alternate idea: "loan" the books by asking people to pass them on to someone else when they are done reading them (e.g. to a friend, to a Little Free Library, etc.)

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