I think there is a very high probability of AGI becoming a reality in less than 5 years. I am trying to figure out a good investment strategy given this prediction while keeping in mind that there is a good chance the prediction is wrong.
I am assuming AGI at first will require very expensive hardware (in the million dollar range) and thus be limited in its adoption due to high costs and processor supply shortages. The huge economic impacts will be delayed by two years or so until hardware production can be scaled up and costs lowered. During this time ASI will start developing but it will be slowed due to computational limits of the hardware and supply constraints.
1) Given the above assumptions what is a good investment strategy for the next 5 years? 2) Given AGI is developed in 5 years, in what ways are my secondary predictions wrong?
"How to invest" does not (and CAN NOT) have simple passive long- or medium-term strategies for a general scenario like this. What you should ask yourself are the following:
Note: I'm mostly investing monetarily using fairly standard "just get market returns" vehicles, with an outsized real-estate portion. This implies that I assign a small-ish chance to truly radical change on a decade or two timeline. I recommend this for almost everyone who's primarily passive in their investments (put money in, but don't actively manage it and don't have any particular passion, skill, or knowledge that amplifies the investment value).
These are my half baked thoughts on this, putting aside alignment and AI risk completely:
I am betting that large returns will come to those that either own the models underlying AGI (if they are hard / expensive to recreate) and supply them to others via a paid API, or those that build compelling products using AGI. The 2nd category of companies will probably be startups that pop up once we have AGI, so no way to invest in them right now unless you can invest indirectly in a VC fund you think will be likely to fund those startups.
For the 1st category, I think OpenAI and DeepMind are the two most likely candidates. Deepmind you can invest in via Alphabet, but OpenAI is private. However, Microsoft has invested in OpenAI and has some sort of agreement to allow them to supply OpenAI models via Azure. Although Microsoft's current market cap is largely not driven by its stake in / agreement with OpenAI, I think AGI is a large enough breakthrough that it would quickly drive much more of the value of Microsoft once / if it is created.
Therefore I've bought a bunch of Alphabet and Microsoft stock.
What are your thoughts on ASML, TSMC, INTEL and other semiconductor fabs + suppliers? It seems to me that the demand for compute will skyrocket and the companies that manufacture processors (TSMC, Samsung, Intel) and the companies that make tools to make processors (ASML , ??) will expand by orders of magnitude. I think it's a safer bet than Google, MSFT as there are no real competitors and not enough time for competitors to appear.
Yes that makes sense to me - I already own some TSMC and Intel. Samsung also has their own fabs I believe so could be another alternative. I suspect the early AGI businesses will just use existing/already deployed hardware though, so I'd say the hardware manufacturing stocks would rise with a delay.