He made 439% with AI, his own banks forced him to sell everything
Fortune favors the bold. Virgil had Turnus say this phrase ("audentes fortuna iuvat") in the Aeneid, just before a battle he would ultimately lose. Twenty centuries later, it could almost serve as a motto for Leopold Aschenbrenner. Just a few weeks ago, the former OpenAI researcher was seen as a prodigy on Wall Street. His fund, Situational Awareness, launched in mid-2024 after his dismissal, boasted a gain of 439% net of fees in just the first half of 2026, a bet built almost entirely on the belief that artificial intelligence would reshape the global economy. However, the correction that has hit AI stocks since late July caught him at the worst possible moment: constrained by margin calls, he was forced to sell his entire portfolio of listed stocks in a single transaction. Key points of this article: * Former Wall Street prodigy Leopold Aschenbrenner suffered a financial shock by selling his entire stock portfolio due to the correction in AI stocks and margin calls. * Despite this forced sale, Aschenbrenner surprisingly encouraged his investors to reinvest, seeing the correction as a buying opportunity. A 4x leverage that allows no mistakes ---------------------------------------------------------------------------------------------- The setup was simple on paper, formidable in practice. Situational Awareness was betting on the rise of the entire AI infrastructure chain (energy, data centers, memory chips), with positions in Bloom Energy, CoreWeave, Nebius, Lumentum, and Coherent. Its last known regulatory filing, the 13F for the first quarter, showed approximately $13.68 billion in notional exposure, of which $8.46 billion was in put options alone. On the other hand, the fund was betting against software stocks like Adobe. However, both bets turned against him at the same time: AI stocks plummeted, while the shorted software stocks held up relatively well. With leverage climbing up to 4 times the investment, according to CNBC, the slightest tremor became unbearable. An anonymous source on X even estimated that a single session, that of July 28, cost the portfolio about $600 million. One sale, one buyer: Citadel wins the bid --------------------------------------------------------------------------------------------------------------------- This is when Goldman Sachs, JPMorgan Chase, and Bank of America, the three banks that lent to the fund, stepped in to help him meet his margin calls. Rather than a chaotic liquidation position by position, CNBC reports, citing sources close to the matter, that Situational Awareness sold its entire book of listed stocks, both long and short, in a single transaction to a single buyer. This buyer, confirmed by Bloomberg on July 30, is Citadel, the fund of Ken Griffin. The comparison with the collapse of Archegos in 2021 quickly comes to mind. However, it has its limits: where Bill Hwang exploded in total panic, here the banks managed the exit with several weeks of advance notice and a single identified buyer. A much more civilized outcome, at least on paper. Cornered or visionary? Aschenbrenner already wants to buy again ---------------------------------------------------------------------------------------------------------------------------------------- The most surprising aspect may be the attitude of the main interested party. In a letter to his investors dated July 24, just a few days before the forced sale, Aschenbrenner described the correction as "one of the best buying opportunities since early 2025" and invited his investors to inject new capital starting August 1. The fund is also retaining its private holdings, including a stake in Anthropic, which it is reportedly looking to sell to raise cash. Aschenbrenner is betting in particular on a potential IPO of Anthropic as a catalyst for a rebound across the sector. Convicted or simply cornered, it's hard to tell. SK Hynix, the direct link between Situational Awareness and the Kospi crash ------------------------------------------------------------------------------------------------------------------------------------------------------- Leveraged up to 4 times the investment on AI bets like that on SK Hynix, the South Korean memory chip manufacturer, the fund would have reached a net asset value of about $45 billion on July 1, at its peak, before suffering the margin calls that ultimately forced it to sell everything. Situational Awareness had indeed positioned itself as a cornerstone investor during SK Hynix's IPO on Nasdaq, alongside Baillie Gifford and Coatue, for a combined amount that could reach $7 billion, according to CNBC. SK Hynix alone represented about 6.5% of the fund's declared public portfolio, and the stock has since fallen about 15% from its IPO price of $149. The same stock, coincidentally, that caused the Kospi to plunge this Thursday. One single correction, two distinct victims. This misadventure goes far beyond the case of a single manager, no matter how skilled he may be. It illustrates how the current disaffection for AI stocks primarily punishes those who were right too early and too strongly, on credit. Leverage turns a correct conviction into a bet that can go wrong at the slightest scheduling hiccup, and that is precisely what has cost Aschenbrenner control of his own portfolio.
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