AI Summary
5 min readLeopold Aschenbrenner, the 25-year-old former OpenAI researcher turned hedge fund manager, just lived through one of the most dramatic collapses in recent financial history. Over roughly 20 days, his fund—Situational Awareness—went from a peak of $45 billion under management to being fully liquidated on its public positions, with a single buyer scooping up the entire book in one transaction. The story is a vivid case study in what happens when a brilliant thesis meets extreme leverage and a market that knows exactly where you're vulnerable.
The Rise and the Thesis
Aschenbrenner was no ordinary fund manager. At 23, he left OpenAI's Super Alignment team and wrote a 165-page essay predicting the next decade of AI development—a call that, by the hosts' account, turned out to be remarkably accurate. That essay helped him raise roughly $225 million, which he proceeded to turn into $45 billion over two years—a 1,600% return that made him the poster child of AI investing.
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What you'll learn
- 1 (00:04) **Leopold Aschenbrenner's Fund Is Liquidated** - The hosts reveal that the poster child of Silicon Valley investing has been dethroned after his hedge fund, which was up 1600%, was completely wiped out.
- 2 (01:22) **Leopold's Background and Investment Thesis** - The hosts recap Leopold's origin story: fired from OpenAI at age 23, he wrote a prescient 165-page essay on AI, then raised $225 million and grew it to $45 billion.
- 3 (03:00) **The Mechanics of the Collapse** - The hosts explain how leverage destroyed the fund in about 20 days, starting with a market sell-off in memory stocks.
- 4 (05:30) **The Timeline Unfolds in Real Time** - The hosts walk through the public timeline, starting with a Financial Times report that Leopold was seeking to raise capital after an AI rout.
- 5 (07:14) **Citadel's Ken Griffin Steps In** - The hosts detail how Ken Griffin's team worked with Leopold for six hours before market open to buy the entire book at 40-80 cents on the dollar.
- 6 (09:08) **How the Market Hunted Leopold's Positions** - The hosts explain that rivals used public 13F filings to target Leopold's specific positions, shorting them to force liquidation and buy back cheaper.
- 7 (10:19) **The Aftermath: What's Left of the Fund** - The hosts assess the carnage: almost all public positions are gone, but the fund still holds about $5 billion in Anthropic shares.
+ Full timestamped outline available in the app
Guests on this episode
Show Notes
Leopold Aschenbrenner’s massive liquidation event followed heavy leverage and losses in its AI infrastructure bets. Today, we discuss the July timeline, the sale of the public equity book to Citadel, and the remaining Anthropic stake.
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TIMESTAMPS
0:00 Leopold’s Rise and Fall
2:41 The Unraveling Begins
4:14 Margin Calls and Liquidation
7:03 Citadel Swoops In
9:13 Hunting the Position
10:19 Aftermath
11:25 Anthropic Saves the Fund
13:44 Ken Griffin's History
16:30 Was Leopold Right?
18:41 Bear Case
21:21 Recursive Self-Improvement
22:25 Ledger
23:24 Leverage Lessons
23:59 Closing
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RESOURCES
Josh: https://x.com/JoshKale
Ejaaz: https://x.com/cryptopunk7213
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Not financial or tax advice. See our investment disclosures here:
https://www.bankless.com/disclosures
Josh works with Anthropic as a contractor. All views expressed are his own and do not represent Anthropic, its leadership, or its affiliates. Nothing in this episode is investment advice.
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