Now that AI developers are getting paid like pro athletes, it’s fitting that fans are placing big bets on how well they’re doing their jobs.
On Kalshi, Polymarket and other sites where people wager “predictions” on real-world events, gamblers lay down millions each month on their picks for AI’s top model.
The AI arms race is playing out in plain sight on social media, ranking sites and obscure corners of the internet where enthusiasts hunt for clues. The constant buzz makes the topic appealing for wagers, though not every scrap of information is meaningful.
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Trading volume across AI prediction markets has surged to around $20 million this month. Kalshi, the only platform currently available in the U.S., is seeing 10 times the volume on AI trades compared with the start of the year, a spokesman says.
Each bet, or “contract,” is priced in cents to reflect the odds: McCoy bought thousands of Gemini contracts at around 40 cents, meaning it had a 40% chance of winning. If the bet had settled and Gemini won, McCoy’s 40 cents would become a dollar. If Gemini lost, McCoy would lose it all.
But much of the action happens before the final outcome. As more people piled into the Gemini bet, the contract price rose. McCoy sold when it had reached 87 cents. It’s like betting on a sports match, only with the option to cash out when the odds rise in favor of your bet.
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Strategies vary. Some bet on the big industry players, others buy low on less-known or soon-to-be-updated models. Some compare odds on Kalshi and Polymarket to find arbitrage opportunities in the odds.
As volume for these AI trades continues to grow, the incentive for good information will only increase, and the squeeze on casual bettors will get tighter, says Robin Hanson, a professor of economics at George Mason University.
“When you have better information in these kinds of markets, you can make better decisions,” Hanson says. “If you know a little more, you make more money.”
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Source: Gamblers Now Bet on AI Models Like Racehorses
Robin Edgar
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