What if a flagship AI model is recalled after dangerous failures?
A flagship model pulled post-launch for systematic dangerous outputs dents the vendor and raises liability premia, cooling the AI-capex bid — NVDA/AVGO/memory and semis sell off as the demand-pull narrative wobbles, dragging high-beta crypto with it. Rhymes with the Jan-2025 DeepSeek selloff and the Feb-2025 TSMC drop, where a single AI-demand scare repriced the whole chip complex. Channel is a capex-confidence reversal (ai_capex -0.6); the recall is vendor-specific, so the read should concentrate in AI-exposed names rather than the broad tape.
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 0–6 months 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 flagship model is pulled post-launch after systematic dangerous-output failures, denting the vendor and raising liability premia. The trigger decomposes into signed root‑shocks — AI capex ▼ · 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 | ▼ -1.3% hist -0.88–-0.31% · other way +4.19% (n=12) |
| 2 | Broadcom AVGOon Hyperliquid 📈 chart | Equity | ▼ -1.0% hist -1.04–+0.56% · other way +5.73% (n=12) |
| 3 | Micron MUon Hyperliquid 📈 chart | Equity | ▼ -0.9% hist -3.96–+0.46% · other way -1.63% (n=12) |
| 4 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -0.8% hist -0.55–+0.01% · other way +1.37% (n=12) |
| 5 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -0.7% hist -9.42–+1.46% · other way -17.09% (n=11) |
| 6 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -0.7% hist -1.72–+2.59% · other way +10.05% (n=12) |
| 7 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.6% model prior · unmeasured |
| 8 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -0.5% hist -8.25–+2.3% · other way +0.11% (n=11) |
| 9 | AMD AMDon Hyperliquid 📈 chart | Equity | ▼ -0.5% hist -1.14–+0.14% · other way -3.31% (n=12) |
| 10 | TSMC TSMon Hyperliquid 📈 chart | Equity | ▼ -0.5% hist -0.52–+0.23% · other way +1.86% (n=12) |
| 11 | Marvell MRVLon Hyperliquid 📈 chart | Equity | ▼ -0.5% hist -0.76–+0.93% · other way +0.78% (n=12) |
| 12 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.4% hist -0.41–-0.07% · other way +0.03% (n=12) |
| 13 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.4% hist -4.97–+1.64% · other way +3.62% (n=12) |
| 14 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.4% hist -0.03–+0.56% · other way -2.93% (n=12) |
Probable recommendation
Why we may diverge from history
Trust the cascade SHORT HYG: history is a thin/stale signal — analogues are tiny (-0 to -2%) 2018 chip-tightening and Taiwan windows with near-zero credit content, useless for a model-recall liability shock.
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 | -7.7% · 5d -6.4% | 72% | 39 | 0.34 | ✓ matches cascade |
| MU MU | SHORT | -3.0% · 5d -3.2% | 71% | 40 | 0.32 | ✓ matches cascade |
| INTC INTC | SHORT | -4.4% · 5d -2.7% | 65% | 40 | 0.30 | ✓ matches cascade |
| ETH ETH | SHORT | -7.2% · 5d -5.3% | 63% | 40 | 0.21 | ✓ matches cascade |
| NVDA NVDA | SHORT | -0.2% · 5d -3.1% | 63% | 40 | 0.19 | ✓ matches cascade |
| Gold XAU | LONG | +0.5% · 5d -0.2% ↺ fades | 61% | 40 | 0.19 | · |
| AMD AMD | SHORT | -0.8% · 5d -2.2% | 61% | 40 | 0.17 | ✓ matches cascade |
| NDX NDX | SHORT | -0.2% · 5d -1.1% | 61% | 40 | 0.16 | ✓ matches cascade |
| Bitcoin BTC | SHORT | -4.4% · 5d -3.1% | 59% | 40 | 0.14 | ✓ matches cascade |
| QCOM QCOM | SHORT | -2.2% · 5d -2.7% | 57% | 40 | 0.11 | ✓ matches cascade |
| US dollar DXY | SHORT | -0.0% · 5d +0.0% ↺ fades | 55% | 40 | 0.09 | · |
| SMH SMH | LONG | +0.3% · 5d -0.8% ↺ fades | 53% | 40 | 0.06 | ⚠ differs |
| MRVL MRVL | LONG | +1.2% · 5d -2.0% ↺ fades | 53% | 40 | 0.05 | ⚠ differs |
| 10y yield DGS10 | SHORT | -1bp · 5d +2bp ↺ fades | 53% | 40 | 0.05 | · |
Why this probability
Full frontier-model recall post-launch is rare; guardrails strong; 6mo window short; reputational caution high. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.