AI learned to answer,
Now it has to make decisions. ๐ง
๐Wave 1 was fluency โ summarize, search, write, code. That already changed knowledge work.
๐Wave 2 is judgment โ hedge, price, allocate, reform. Every action rests on a forecast about what will happen next.
โผ๏ธThe missing layer: calibrated judgment under uncertainty. When an AI says 70%, events like that should happen about 70% of the time.
Simple to say. Extremely hard to build.
To predict more accurately, you need Yarrow. โ๏ธ
Every decision is a forecast. โ
ยท A bank sizes an FX hedge โ "Will USD/SGD break 1.30 by Q3?"
ยท An insurer prices a policy โ "How large will claims run this year?"
ยท A government designs a carbon tax โ "Will electricity prices rise more than 8%?"
A decision is only as good as the forecast underneath it. And only a calibrated forecast can be trusted. โ๏ธ