After being fired by OpenAI in 2024, Aschenbrenner became famous in Silicon Valley with his declaration “Situational Awareness”. Within two years, he established a hedge fund worth $45 billion, backed by the co-founders of Stripe. This fund adopted a high-leverage long-short strategy, betting on AI infrastructure and shorting traditional software, achieving returns of over 1,000% at times. However, due to the fact that AI and traditional software were driven by the same macro factors, they both rose and fell together, resulting in double losses for the fund in July 2025. Subsequently, the SEC issued subpoenas to institutions such as Goldman Sachs and JPMorgan to investigate related trading records. The fund eventually sold its leveraged positions at a discount to Citadel. Although this collapse did not trigger a systemic crisis, it exposed the risks of high leverage driven by AI narratives and the fragility of risk control mechanisms. After the incident, Aschenbrenner added another $500 million in investments.
After Aschenbrenner, a former researcher at OpenAI, was fired in 2024, he became famous in Silicon Valley with his declaration “Situational Awareness”. Within two years, he established a hedge fund worth $45 billion, backed by the co-founders of Stripe, and its returns exceeded 1,000% at one point. The fund adopted a high-leverage (about 400%) long-short strategy, betting on AI infrastructure and shorting traditional software. However, due to both being driven by the same macro factors, they experienced “simultaneous rises and falls,” resulting in double losses in July 2025. Subsequently, the SEC issued subpoenas to institutions such as Goldman Sachs and JPMorgan Chase to investigate related transaction records. The fund eventually sold its leveraged positions at a discount to Citadel. Although this collapse did not trigger a systemic crisis, it exposed the risks of high leverage driven by AI narratives and the fragility of risk management mechanisms. After the scandal, Aschenbrenner added another $500 million in investments.