Former OpenAI Researcher Bets on AI Stocks After $35 Billion Wipeout
Six weeks after AI bets almost wrecked his hedge fund, Leopold Aschenbrenner is placing cash into the identical corporations once more. His hedge fund, Situational Awareness, purchased name choices on AMD, Bloom Energy, CoreWeave, SK Hynix and SanDisk, CNBC reported, citing sources. The trades ran from late final week into this week.
The former OpenAI researcher grew to become well-known for a 2024 essay arguing that AI might attain human-level intelligence by 2027. He constructed an funding enterprise round that perception, backing corporations supplying the computing capability and electrical energy AI wants.
July uncovered how harmful that guess had change into. Borrowed money magnified falling share prices, triggering calls for for money the fund couldn’t meet. Assets shrank from a peak above $45 billion to roughly $10 billion, based on CNBC.
What July Cost Leopold Aschenbrenner
Ken Griffin’s Citadel bought distressed holdings at a discount. Situational Awareness stored non-public investments, together with Anthropic. The SEC later subpoenaed Wall Street banks over their dealings with the fund. The reported inquiry carried no allegation of wrongdoing.
His return makes use of name choices: contracts that allow patrons buy shares at a hard and fast value earlier than a deadline. When paid for upfront with out borrowing, their losses are capped at the purchase cost. That whole quantity can nonetheless disappear if the choices expire nugatory.
The acquainted names have drawn consideration. On Friday, CNBC’s Jim Cramer wrote:
“Someone is capturing towards all of the Situational Stocks!”
Friday’s buying and selling was blended: Bloom rose almost 7% and AMD nearly 3%. SanDisk and CoreWeave fell.
AMD’s outstanding put options also recently outnumbered calls, although these contracts can mirror traders defending present holdings.
It stays unclear whether or not Aschenbrenner is utilizing surviving money or recent investor cash. He is once more betting on the businesses behind the AI increase, with contracts that put a deadline on the payoff.
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