I think it works like this: If it's going to rain, the value of an umbrella is $50, if not, it is 0.

Since you don't know if it's going to rain or not, you are going to value it based on how likely each of these events are. Now the weather report came out, and there's not going to be any rain.

The stock market has lots of guards against volatility, but the AI story bypasses all of them - they're saying that AI is the only thing that is going to matter economically, and AI value is exponential - meaning past performance can be discounted, since almost all value resides in the future.

This means that all companies valuations have been reduced to a single dimension - how much companies can contribute to AI, this increases volatility, since now their value is highly correllated with AI