This is a special post for quick takes by AshL. Only they can create top-level comments. Comments here also appear on the Quick Takes page and All Posts page.
A lot of people seem to share the belief that as individual investors, investing in publicly traded big tech AI companies (e.g. Google, Microsoft, Meta) won't contribute meaningfully to AI risk.
I've already outlined some of my thoughts on this in a recent post on ethical investing in light of AI risk, but here I'd like to further challenge a particular argument that I've seen made in favour of investing in big tech still being an ethical option.
The argument is that these companies would be able to spend as much as they would like to on the AI build out even without borrowing, given they have such large cash war chests. So any support to the share price by your purchase would have no impact on total spending given no borrowing was required.
I've seen this view often put forward in some of the top voted AI investment related post and comments. An example is given below from this post on how to ethically make money off AGI.
"But Microsoft and Google are not like that. They already have infinite war chests and are not going to be spending more or less money on AI based on your investment. Nor is Nvidia going to do anything but maximize along its capacity and scaling constraints, money isn't a factor. I think buying such stocks is fine."
I think the recent announcements around big tech bond issuance to pay for the AI build out should cause people to update their views here. It's projected that big tech firms will raise hundreds of billions of dollars this year. Even those with huge cash positions such as Google are raising money. Clearly even big tech cannot build enough data centres without borrowing. The link between stock purchase, higher share price, greater borrowing and greater spend on AI build out seems more concrete this year than it did previously.
The magnitude of investment decisions is so small compared to your career or even donations though, such that I think a non-tech portfolio is dominated by investing in tech and donating. Like, Nvidia will probably spend $2 trillion on the AI buildout in the next couple of years if no pause happens. If a pause does happen, it'll be maybe $1 trillion. So the delta is $1 trillion. Other than not investing in them, how can you achieve a marginal reduction in investment? Plausibly you can do >100x better by donating.
METR's entire budget is a few million (there are ~35 employees) and I think there's at least a 2.5% chance that METR substantially contributes to a pause in worlds where AI looks unacceptably dangerous. Suppose that their contribution in such worlds is 10%, so the expected reduction in AI buildout is $2.5B. If you could double this with another $50 million, you would buy another $2.5B of expected reduction in AI buildout, which is a 50:1 ratio. This ignores all the other things METR will probably do, like cause companies to invest $billions more in safety research, make that research more effective through objective standards, and publish safety research itself.
Now suppose you invested $5B in Nvidia and half the money went straight to the AI buildout, adding $2.5B. If the returns are more than 1% higher you would be better off investing in them and donating the excess. Nvidia has outperformed the S&P by ~500% over the past 5 years, so investing and donating passes cost-benefit by over two orders of magnitude.
If you think I'm biased towards my employer, there are probably better donation targets than METR, e.g. a dozen other AI safety nonprofits, plus political donations. But basically, I think avoiding investing in tech is strongly -EV unless you have a specific deontological prohibition on it.
I've been chewing on this a bit more, I think your assumptions around the chance of METR contributing to a pause and METR's contribution are doing a lot of heavy lifting here to get to your >100x better by investing and donating conclusion.
A concern I have is that AI and tech companies might also have paths that offer leverage in terms of impact per dollar spent. For example lobbying might offer 20:1 leverage in terms of dollar spent vs expected increase in AI buildout due to less likelihood of pause. Safety washing and media campaigns might be similar.
At the very least it should be apparent that lobbying is an option available for both sides, and I can't see why pro-pause and anti-pause lobbying wouldn't be symmetrical in value gained per dollar spent. So for donations to AI charities focused purely on lobbying there might not be much additional leverage achieved above and beyond what the tech company is able to achieve from your additional cash injection through their own lobbying.
100% agree that career and donations are impactful. I still think the allocation of capital can be too.
I'm not going to challenge your strategy around investment and then donation. For those with higher confidence that they have a place to donate that provides leverage such that the end result is +EV then I can see how that makes sense. Particularly if you have longer timelines.
I personally don't have enough confidence in the potential impact of donation targets to be sure that following such a strategy will outweigh the certain -EV of contributing directly to the build out. If I was closer to some of the safety organisations involved maybe it would be different.
I think my challenge to the specific argument of "your investing has no impact on the spending of big tech" is still valid. I think your strategy is compatible with this challenge, you just try to offset the -EV with greater +EV through donation later on.