In June 2024, former OpenAI researcher Leopold Aschenbrenner went viral for a behemoth, 165-page essay titled “Situational Awareness: The Decade Ahead,” which predicted AI would become more powerful than humans. The 25-year-old decided to convert that foresightedness into fortune. Within months, he set up a hedge fund named for the essay to invest in public companies benefiting from the AI boom and prominent AI startups. Most investors were required to put in a minimum of $25 million into the fund, which drew backing from elite financial institutions like JPMorgan, Goldman Sachs and Bank of America, as well as billionaires like Stripe cofounders Patrick and John Collison, the Wall Street Journal reported. The fund had turned hundreds of millions of dollars into $20 billion in assets by mid-2026.

But by the end of July, investors got spooked by the amount of AI spending and markets had started to turn. The fund collapsed from $45 billion to $10 billion in a matter of days—a whopping 77% wipeout—thanks to highly leveraged bets on volatile AI infrastructure stocks like Nebius, SanDisk and CoreWeave. Billionaire Ken Griffin’s firm Citadel stepped in to bail out Aschenbrenner, buying up the bulk of its positions at a steep 10% discount, according to the WSJ report. By the end of the fire sale, Situational Awareness was left with a slimmed down portfolio of stocks and startups valued over $10 billion, including a significant stake in Anthropic. The sudden vaporization of the........

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