What if a court holds an AI vendor liable for its chatbot's lies?
A defamation precedent for hallucinations opens systemic liability but is diffuse and slow, so the equity hit is modest: NVDA/semis ease on a marginal cut to enterprise AI adoption pace, crypto beta soft. Rhymes with Section-230-erosion scares that re-rate platform risk gradually rather than in one gap-down. Skeptical: this is an insurance/opex drag on deployers, a weak channel to NVDA — the -0.4 ai_capex is the right magnitude, not larger.
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 1–3 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. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. A landmark ruling holds a vendor liable for model hallucinations, opening systemic AI-liability exposure. The trigger decomposes into signed root‑shocks — AI capex ▼ · Risk appetite ▼ — which propagate through our causal graph to the markets below.