Former FTX Insider Leopold Aschenbrenner Sees AI Fund Collapse

Leopold Aschenbrenner, founder of the hedge fund Situational Awareness and a former member of the FTX Future Fund team, is facing a major crisis after a swift downturn in AI stocks. His leveraged positions were liquidated following heavy losses this month. The fund had grown rapidly earlier in the year, but borrowing money to upsize bets on companies like Sandisk, Nebius Group, and SharonAI Holdings backfired when those shares dropped at least thirty percent in July.

Reports indicate that Situational Awareness faced severe margin calls and consulted investment bankers regarding an orderly wind down. Citadel reportedly purchased the bulk of the fund stock portfolio as the situation deteriorated. Aschenbrenner previously gained attention for impressive returns and investments in AI firms like Anthropic, mirroring strategies from his earlier days working under Sam Bankman Fried.

This marks the second major financial collapse tied to Aschenbrenner's career. He previously worked on the FTX Future Fund before resigning right before the exchange filed for bankruptcy in 2022. After a subsequent stint at OpenAI, he launched his hedge fund, which peaked at massive asset valuations before the recent market correction wiped out those gains.