It's also a huge incentive to overstate the severity. Their goal is to profit off the panic they can produce, so every statement they make is likely heavily biased in that direction.
That said, I don't mind that these "research" organizations exist. Only bothers me when they put the general public at risk (or attempt to) for their own gain.
The point is the counter balance the other side - companies have an incentive to overstate their upside and understate their risk.
Short sellers want the opposite. So they both present their best cases and let the public decide, much like how lawyers will defend their own clients to the last breath regardless of the amount of evidence against them
I disagree. AMD needs to maintain it's reputation over time. Short sellers make their profit over a few hours/days and don't care if they are proven wrong.
So, AMD has vastly more incentive to be accurate than short sellers.
Pity that vast incentive didn't seem to work out when they promoted all these chips as having "Firmware Trusted Platform Module", "Secure Encrypted Virtualization", "AMD Secure Processor", and "AMD Secure OS" as features.
AMDs incentive, like any corporation, is to maximise shareholder value. Same as any tiny little security research firm. If a research firm can maximise their profit buy discovering vulnerabilities and shorting stock before disclosing them, is that any ethically worse than a chip company rushing out flawed hardware with big flashy marketing bullet points claiming how secure they are?
(I'm not saying short-selling chip vendor stocks on the back of vulnerabilities is a way I'd choose to make a living, but surveillance capitalism doesn't seem an "ethically better" industry to work in either...)
As to ethics that's mostly irrelevant to this discussion. Both sides could have ethical behavior, I am simply pointing out which side has the larger incentives to exaggerate. After all the stock could drop and a short seller could still lose money. They need the stock to drop a lot even over a minor issue.
While the dollar value of AMDs incentive is without doubt larger - the existential value of the smaller amount incentivising the researcher is likely more motivating...
On an individual level, it's much less I'd think. Inciting a panic could be life changing amounts of money for the researchers, paid out by the hedge fund returns.
AMD isn't going to crash and burn over these flaws anymore than Intel (at 5 year high) did.
That said, I don't mind that these "research" organizations exist. Only bothers me when they put the general public at risk (or attempt to) for their own gain.