Leopold Aschenbrenner, 25, was once hailed as the great German genius of AI trading.
Financial Times reported that this former OpenAI researcher delivered gains of 1,551% since opening his hedge fund Situational Awareness in 2024. Within the first six months of 2026, Situational Awareness was already up a staggering 439%.
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According to CNBC, Situational Awareness held $45 billion in assets at its peak, mostly in companies tied to the AI data center buildout. Bigwigs in tech like GitHub’s CEO Nat Friedman and Stripe’s co-founders Patrick and John Collison helped prop up Aschenbrenner’s growing empire.
But even though Aschenbrenner made some great picks in the AI bull run, he was caught off guard by a nasty market correction.
Not only did the companies Aschenbrenner held take a nosedive, but he was also losing big on short positions in legacy software names like Adobe.
That would be disappointing, but not necessarily devastating, had it not been for one thing: Borrowing money. A report from MarketWatch suggested some of Aschenbrenner’s positions had as much as four times leverage, meaning prices moved up or down four times the asset’s market value.
When semiconductor stocks soared, Situational Awareness was basically printing billions in gains. However, once volatility returned to these high-flying names, the margin calls from brokers flooded in, putting Aschenbrenner on the brink of liquidation.
According to The New York Times, Aschenbrenner frantically phoned for support from Wall Street firms to raise cash ASAP. On July 30, Situational Awareness narrowly avoided destruction by inking a deal to sell $10 billion worth of its public stock to market maker Citadel.
In a letter to investors obtained by Financial Times, these events led to a 67% decline in Situational Awareness’s portfolio for July.
Aschenbrenner took “full responsibility” for these losses, telling investors, “These were very expensive scars, but I am dedicated to ensuring they will be invaluable lessons for our organization and for myself as we move forward.
MoneyWise reached out to Situational Awareness for comment, but we didn’t hear back by the time of publication.
Source: Yahoo Finance