What if a wave of AI liability litigation creates large contingent losses for AI leaders?
A wave of litigation over AI-caused harms and copyright creates large contingent liabilities for AI leaders, repricing the sector for legal risk.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 3–10 years horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. A wave of litigation over AI-caused harms and copyright creates large contingent liabilities for AI leaders, repricing the sector for legal risk. The trigger decomposes into signed root‑shocks — Volatility (VIX) ▲ · AI capex ▼ · Credit spreads ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | Nvidia NVDAon Hyperliquid 📈 chart | Equity | ▼ -0.8% hist -0.88–+0.49% · other way +4.24% (n=12) |
| 2 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.7% hist +0.25–+0.44% · other way -4.69% (n=12) |
| 3 | Broadcom AVGOon Hyperliquid 📈 chart | Equity | ▼ -0.7% hist -1.23–+3.13% · other way +6.77% (n=12) |
| 4 | Micron MUon Hyperliquid 📈 chart | Equity | ▼ -0.6% hist -0.46–-0.04% · other way -0.67% (n=12) |
| 5 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -0.6% hist -1.19–+0.14% · other way +9.23% (n=12) |
| 6 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -0.5% hist -0.62–+0.8% · other way +1.99% (n=12) |
| 7 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -0.5% hist -18.88–+1.02% · other way -18.52% (n=10) |
| 8 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.5% hist -0.46–+0.23% · other way +0.24% (n=12) |
| 9 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.4% model prior · unmeasured |
| 10 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -0.4% hist -9.74–+1.88% · other way -0.75% (n=10) |
| 11 | High-yield credit HYG 📈 chart | Rate | ▼ -0.4% hist -0.27–-0.1% · other way -0.33% (n=12) |
| 12 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.3% hist -2.77–+0.83% · other way +2.89% (n=11) |
| 13 | AMD AMDon Hyperliquid 📈 chart | Equity | ▼ -0.3% hist -0.82–+1.17% · other way -2.37% (n=12) |
| 14 | TSMC TSMon Hyperliquid 📈 chart | Equity | ▼ -0.3% hist -0.42–-0.02% · other way +2.14% (n=12) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 40 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| SOL SOL | SHORT | -14.5% · 5d -7.0% | 100% | 14 | 0.65 | ✓ matches cascade |
| ETH ETH | SHORT | -8.2% · 5d -4.5% | 73% | 19 | 0.35 | ✓ matches cascade |
| AVGO AVGO | LONG | +3.1% · 5d -1.0% ↺ fades | 62% | 33 | 0.23 | ⚠ differs |
| Gold XAU | LONG | +1.2% · 5d +0.2% | 59% | 40 | 0.17 | · |
| Bitcoin BTC | SHORT | -2.4% · 5d -2.3% | 60% | 22 | 0.16 | ✓ matches cascade |
| US dollar DXY | LONG | +0.5% · 5d +0.2% | 59% | 40 | 0.15 | · |
| MSTR MSTR | SHORT | -0.8% · 5d -2.2% | 59% | 40 | 0.14 | ✓ matches cascade |
| SMH SMH | LONG | +1.0% · 5d -0.3% ↺ fades | 56% | 40 | 0.11 | ⚠ differs |
| QCOM QCOM | SHORT | -2.2% · 5d -2.0% | 55% | 40 | 0.07 | ✓ matches cascade |
| ASML ASML | SHORT | -1.2% · 5d -2.5% | 54% | 40 | 0.06 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.1% · 5d -0.1% | 53% | 40 | 0.04 | ✓ matches cascade |
| TSM TSM | SHORT | -0.2% · 5d -1.2% | 51% | 40 | 0.02 | ✓ matches cascade |
| NVDA NVDA | LONG | +0.9% · 5d -2.3% ↺ fades | 44% | 40 | 0.00 | ⚠ differs |
| Volatility VIX | LONG | +0.0% · 5d +3.7% | 44% | 40 | 0.00 | ✓ matches cascade |