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.
Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.
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 (electric blue) over time vs the market's (Polymarket, amber), 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. Loading the probability audit trail…
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.