The Meteoric Rise and Sudden Fall of Leopold Aschenbrenner’s Fund

Two years ago, Leopold Aschenbrenner claimed he was one of the few in the world who saw the future clearly. In an extensive 165-page essay that became required reading in Silicon Valley, the former OpenAI researcher positioned himself as a prophet for the approaching era of artificial superintelligence.

However, this week, the limitations of the 25-year-old's vision were exposed when the AI-focused hedge fund he manages — named Situational Awareness, which is also the title of his viral June 2024 manifesto — collided with market reality.

Earlier this month, his fund managed assets worth $45 billion. On Thursday, he was forced to sell his assets at a significant discount to Ken Griffin's Citadel fund, as the fund's holdings reportedly plummeted to around $10 billion.

The story of Aschenbrenner's meteoric rise and sudden fall has captivated both Wall Street and tech circles, making him the most prominent victim to date of the volatility accompanying the AI bubble.

His online followers saw Aschenbrenner, who was the valedictorian of his class at Columbia University at just 19, as a genius of the next big trend, and followed his fund's quarterly reports to identify hot AI stocks. According to the Wall Street Journal, before this month's fall, the fund had recorded a return of more than 1,000% since its inception.

Lack of Money Management Experience

Critics noted that Aschenbrenner had no experience in money management before launching his fund in July 2024, calling him "more lucky than intelligent." Some pointed to his early work experience at the failed crypto company FTX, where he helped disgraced founder Sam Bankman-Fried manage a charity.

Others on Wall Street, including former traders at international investment banks, noted that given reports that the fund used leverage of up to 400%, the collapse was not surprising. "Many people saw this explosion as a question of 'when', not 'if'," said Jerry Diao, who runs a training company for Wall Street.

According to sources, about two-thirds of the fund's holdings were in long and short positions in public stocks. The rest were holdings in private companies, led by a multi-billion dollar investment in Anthropic. The dramatic collapse also coincides with his wedding planned for this weekend; Aschenbrenner is engaged to Avital Blewit, chief of staff to Anthropic CEO Dario Amodei.

Firing from OpenAI

In 2023, Aschenbrenner joined the team at OpenAI, working under Ilya Sutskever. After a hacker breached OpenAI's internal systems, he wrote a memo to the board warning that the company's security was not strong enough to stop foreign espionage, specifically mentioning China. In 2024, the company fired Aschenbrenner after accusing him of unlawfully sharing confidential information — a definition he denied.

Weeks after leaving OpenAI, Aschenbrenner leveraged his rising fame to raise about $225 million in seed capital from investors including Stripe founders Patrick and John Collison and former GitHub CEO Nat Friedman. "Before long, the world will wake up," Aschenbrenner wrote at the time, predicting a "wild ride" for those who understand the trajectory of AI.