BRUTAL: Leopold Aschenbrenner rebuilt his AI bets after July's forced liquidation, and now he's staring down another sharp selloff.
The 25-year-old former OpenAI researcher's fund, Situational Awareness, had already been through one brutal reckoning this year. It peaked at $45 billion in assets in July, before 400% leverage and a sudden AI stock rout forced margin calls that wiped out roughly $35 billion and pushed Citadel to buy the distressed positions at a discount.
Weeks later, Aschenbrenner came back swinging. In early September, Situational Awareness bought hundreds of millions of dollars in options premium across the same corner of the market, AMD, Bloom Energy, CoreWeave, SK Hynix, SanDisk, the Roundhill Memory ETF (DRAM), and Intel, essentially doubling down on the AI infrastructure thesis that nearly broke him the first time.
It hasn't gone well so far. Since September 8, six of the seven positions have been hammered: CoreWeave down 37.4%, SK Hynix down 25.8%, SanDisk down 23.8%, DRAM down 22.9%, Bloom Energy down 18.1%, and Intel down 9.4%. Only AMD is in the green, up 9.1%. That works out to an average decline of 18.3% across the basket, though his actual losses depend on position sizing, strike prices, and any trades made since.
Aschenbrenner may ultimately be right about AI's long-term trajectory, he's built his entire reputation on that conviction. But options contracts come with expiration dates, and conviction without correct timing is exactly what cost him $35 billion the first time around.
#AI #Hedgefunds #StockMarket #Options #WallStreet
The 25-year-old former OpenAI researcher's fund, Situational Awareness, had already been through one brutal reckoning this year. It peaked at $45 billion in assets in July, before 400% leverage and a sudden AI stock rout forced margin calls that wiped out roughly $35 billion and pushed Citadel to buy the distressed positions at a discount.
Weeks later, Aschenbrenner came back swinging. In early September, Situational Awareness bought hundreds of millions of dollars in options premium across the same corner of the market, AMD, Bloom Energy, CoreWeave, SK Hynix, SanDisk, the Roundhill Memory ETF (DRAM), and Intel, essentially doubling down on the AI infrastructure thesis that nearly broke him the first time.
It hasn't gone well so far. Since September 8, six of the seven positions have been hammered: CoreWeave down 37.4%, SK Hynix down 25.8%, SanDisk down 23.8%, DRAM down 22.9%, Bloom Energy down 18.1%, and Intel down 9.4%. Only AMD is in the green, up 9.1%. That works out to an average decline of 18.3% across the basket, though his actual losses depend on position sizing, strike prices, and any trades made since.
Aschenbrenner may ultimately be right about AI's long-term trajectory, he's built his entire reputation on that conviction. But options contracts come with expiration dates, and conviction without correct timing is exactly what cost him $35 billion the first time around.
#AI #Hedgefunds #StockMarket #Options #WallStreet