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Or sign-in if you have an account.His hedge fund's rapid rise made Leopold Aschenbrenner one of Wall Street’s most closely watched AI investors, with his filings scrutinized for clues about the next major AI trade. Photo by ANGELA WEISS/AFP via Getty ImagesLeopold Aschenbrenner is the founder of Situational Awareness, an artificial intelligence-focused hedge fund that sold a chunk of its AI-related public equities on Thursday and saw its assets slump sharply. The former OpenAI Foundation researcher has become a prominent voice in debates over the future of AI, with investors closely following his predictions about the new technology’s trajectory. Through his fund, the 20-something Aschenbrenner has invested in companies expected to benefit from the expansion of AI infrastructure. But a sharp selloff in AI-related stocks has forced the fund to exit many of its positions, highlighting the risks behind some of the market’s biggest AI bets.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorCanada's best source for investing news, analysis and insight.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Investor will soon be in your inbox.We encountered an issue signing you up. Please try againA native of Germany, Aschenbrenner entered Columbia University at age 15 and graduated as valedictorian in 2021. He worked for a stint at the FTX Future Fund of the philanthropic FTX Foundation, founded by disgraced crypto giant Samuel Bankman-Fried. Unlike most hedge fund founders, he had no professional investing experience before launching Situational Awareness in 2024.He is known for his work on AI safety and publishing his views on the future of advanced artificial intelligence systems. After leaving OpenAI in 2024, he released an essay titled ‘Situational Awareness,’ arguing that artificial general intelligence could arrive within years and reshape the global economy and geopolitical competition. The essay gained traction among investors, researchers and policymakers in Silicon Valley and Washington, establishing Aschenbrenner as an authoritative voice in conversations about AI’s future.His fund’s rapid rise made Aschenbrenner one of Wall Street’s most closely watched AI investors, with his quarterly regulatory filings scrutinized for clues about the next major AI trade.The firm has disclosed relatively little about its investment strategy publicly, but it has broadly focused on companies positioned to benefit from the expansion of AI infrastructure. Its portfolio has centred on businesses in the broader ecosystem, including semiconductor and memory chip makers, cloud computing providers and power-related companies.Rather than focusing only on AI model developers, the fund’s investments reflected a broader market thesis that the growth of AI would require massive expansion of infrastructure. The fund has also made private investments, including taking a stake in Anthropic PBC, and it backed AI chip startup MatX.The strategy delivered strong returns early on, with the fund reportedly gaining 270 per cent after fees this year through May. The sharp turnaround has highlighted both the potential rewards and risks of concentrated bets tied to a single market theme.Situational Awareness came under pressure after a sharp decline in AI-related stocks raised questions about whether the sector’s high valuations could be sustained. The fund has since exited the bulk of its public equity positions through a large transaction, with Ken Griffin’s Citadel purchasing a significant portion of those holdings.The unwind came as the fund faced losses tied to its AI-focused portfolio, with reports it worked with prime brokers including Bank of America Corp., Goldman Sachs Group Inc. and JPMorgan Chase & Co. to manage margin requirements and reduce positions. The firm continues to hold private investments, including in Anthropic.Citadel hasn’t commented, so the firm’s reasoning remains unclear. The purchase highlights how larger investment firms can step in when other investors want out, acquiring positions during periods of market volatility. The deal also underscores the divide among investors over AI-related assets; some continue to see long-term opportunities, while others are reassessing valuations after a period of rapid gains.The rapid rise and retreat of Situational Awareness is an acute reminder of how quickly sentiment can shift in one of the market’s hottest sectors. The episode highlights a central tension in the AI boom: Companies building the technological infrastructure may benefit from continued demand, but investors betting heavily on the sector remain vulnerable to shorter-term valuation swings and changing market expectations. For Wall Street, Aschenbrenner’s fund illustrates both the potential upside of investing early in a major technological shift and the risks that come with concentrated exposure to a fast-moving market. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.