Interesting question.  The "base" unit is largely arbitrary, but the smallest subunit of a currency has more practical implications, so it may also help to think in those terms.  Back in the day, you had all kinds of wonky fractions but now basically everyone is decimalized, and 1/100 is usually the smallest unit.  I imagine then that the value of the cent is as important here as the value of the dollar.

Here's a totally speculative theory based on that.  

When we write numbers, we have to include any zeros after the decimal but you never need leading zeros on a whole number.  That is, we write "4" not "004" but if the number is "0.004" there is no compressed way of writing that out.  In book keeping, it's typical to keep everything right-aligned but it makes adding up and comparing magnitudes easier, so you'll also write trailing zeros that aren't strictly necessary (that is $4.00 rather than just $4 if other prices you're recording sometimes use those places).

This means if you have a large number of decimal places, book keeping is much more annoying and you have to be really careful about leading zeros.  Entering in a price as "0.00003" is annoying and easy to mess up by an order of magnitude without noticing.  Thus, having a decimalized currency with a really large base unit is a pain and there's a natural tendency towards a base unit that allows a minimum subunit of 0.01 or so to be sensible.

This only works if you're the only bookmaker in town.  Even if your potential counterparties place their own subjective odds at 1:7, they won't book action with you at 1:7 if they can get 1:5 somewhere else.

Perhaps I misread OP's motivations, but presumably if you're looking to make money on these kinds of forecasts, you'd just trade stocks.  Sure, you can't trade OpenAI per se, but there are lot of closely related assets and then you're not stuck in the position of trying to collect on a bet you made with a stranger over the internet.

So, the function of offering such a "bet" is more as a signaling device about your beliefs.  In which case, the signal being sent here is not really a bearish one.  

If you think there's a 40% chance of a crash, then that's quite the vig you're allocating yourself on this bet at 1:7.  

These are very poor odds, to the point that they seem to indicate a bullish rather than a bearish position on AI.

There's definitely a better than 1 in 7 chance of a general market crash in the next year, given tariffs and recession risk (or, if you define crash loosely, we've already had one).  Given that broader macro risk, merely 1 in 7 of an AI crash probably implies a forecast that AI will outperform the broader market.

If, for whatever reason, one is willing to disregard the macro risk, then there's a lot more upside in just buying QQQ than taking your bet.  

There's a kind of paradox in all of these "straight line" extrapolation arguments for AI progress as your timelines assume (e.g., the argument for superhuman coding agents based on the rate of progress in the METR report).

One could extrapolate many different straight lines on graphs in the world right now (GDP, scientific progress, energy consumption, etc.).   If we do create transformative AI within the next few years, then all of those straight lines will suddenly hit an inflection point.  So, to believe in the straight line extrapolation of the AI line, you must also believe that almost no other straight lines will stay that way.

This seems to be the gut-level disagreement between those who feel the AGI and those who don't; the disbelievers don't buy that the AI line is straight and thus all the others aren't.  

I don't know who's right and who's wrong in this debate, but the method of reasoning here reminds me of the viral tweet: "My 3-month-old son is now TWICE as big as when he was born. He's on track to weigh 7.5 trillion pounds by age 10."  It could be true, but I have a fairly strong prior from nearly every other context that growth/progress tends to bend down into an S-curve at one point or another, and so these forecasts seems deeply suspect to me unless there's some kind of better reason to suspect that trends will continue along the same path.

So, I certainly wouldn't expect the AI companies to capture all the value; you're right that competition drives the profits down.  But, I also don't think it's reasonable to expect profits to get competed down to zero.  Innovations in IT are generally pretty easy to replicate, technically speaking, but tech companies operate at remarkably high margins.   Even at the moment, your various LLMs are similar but are not exact substitutes for one another, which gives each some market power. 

Yea, fair enough.  His prediction was: "I think we will be there in three to six months, where AI is writing 90% of the code. And then, in 12 months, we may be in a world where AI is writing essentially all of the code" 

The second one is more hedged ("may be a world") but "essentially all the code" must translate to a very large fraction of all the value even if that last 1% or whatever is of outsize economic significance.  

The original statement is: 

"I think we will be there in three to six months, where AI is writing 90% of the code. And then, in 12 months, we may be in a world where AI is writing essentially all of the code"

So, as I read that he's not hedging on 90% in 3 to 6 months, but he is hedging on "essentially all" (99% or whatever that means) in a year.

I don't doubt they need capital.  And the Nigerian prince who needs $5,000 to claim the $100 million inheritance does too.  It's the fact that he/they can't get capital at something coming anywhere close to the claimed value that's suspicious.

Amodei is forecasting AI that writes 90% of code in three to six months according to this recent comments.  Is Anthropic really burning cash so fast that they can't wait a quarter, demonstrate to investors that AI has essentially solved software, and then raise at 10x the valuation?