A Former OpenAI Employee Built A $45 Billion Fortune From AI. Then A Hedge Fund Selloff Wiped Out Most of Its Value.

Leopold Aschenbrenner built one of Wall Street's fastest-growing hedge funds by betting that the artificial intelligence boom was only just beginning. Now, the former OpenAI researcher has become one of the AI investing world's most dramatic cautionary tales after his firm reportedly lost most of its value in a matter of days.

Aschenbrenner's hedge fund, Situational Awareness, ballooned to roughly $45 billion in assets earlier this month before collapsing to around $10 billion after a sharp selloff in AI-related stocks forced it to unwind its leveraged positions.

The fund ultimately sold its public equity holdings, including stakes in companies such as SK Hynix and CoreWeave, to Citadel at a discount after facing mounting margin pressure.
The stunning reversal has made the 24-year-old investor one of the highest-profile casualties of the recent volatility surrounding artificial intelligence stocks.

Aschenbrenner first gained widespread attention outside academic AI circles in June 2024 when he published Situational Awareness, a 165-page essay arguing that artificial general intelligence could arrive within just a few years.

Capitalizing on that growing reputation, Aschenbrenner launched Situational Awareness in July 2024 after reportedly raising $225 million in seed funding from prominent technology investors, including Stripe co-founders Patrick and John Collison, former GitHub CEO Nat Friedman and investor Daniel Gross.

The strategy initially delivered extraordinary returns. The Wall Street Journal previously reported that the hedge fund generated gains exceeding 1,000% since its launch, fueling intense interest from investors eager to profit from the AI revolution.

However, CNBC reported that the same aggressive approach that produced outsized gains also left the portfolio vulnerable when semiconductor shares retreated sharply. People familiar with the situation told the outlet that roughly two-thirds of the fund's assets were invested in long and short positions in publicly traded companies before the collapse.

The remaining assets consisted primarily of private investments, including a multibillion-dollar stake in AI startup Anthropic. Several market observers said the fund's extensive use of leverage amplified the losses. Jerry Diao, who runs a Wall Street coaching firm, told CNBC that many professionals believed the fund's collapse was eventually inevitable.

"A lot of people saw this blow-up as a matter of not if, but when," Diao said. "Maybe his views on AI are correct in the long run, but in the public markets, you have to be prepared for the short-term."

Aschenbrenner's rise has been anything but conventional. Born in Germany to physician parents before moving to the United States, he skipped multiple grades and graduated from high school at age 15 before attending Columbia University, where he became valedictorian at just 19 years old.

While at Columbia, he co-founded the university's chapter of Effective Altruism, a movement that encourages entrepreneurs and investors to generate significant wealth to maximize charitable impact.

The 25-year-old investor followed an unconventional path into finance. After graduating as valedictorian from Columbia University at just 19 years old, he joined OpenAI's Superalignment team, which focused on long-term AI safety.

His tenure at OpenAI ended in 2024 after the company dismissed him over what it described as an improper disclosure of internal information. Aschenbrenner has disputed that characterization, saying he shared a largely nonconfidential planning document with outside researchers for feedback.

He has also argued that his dismissal followed disagreements over security concerns he raised about OpenAI, while the company has maintained those concerns were unrelated to his departure.

Beyond OpenAI, Aschenbrenner has remained closely connected to the AI industry. According to a Fortune profile, he is engaged to Avital Balwit, chief of staff to Anthropic CEO Dario Amodei. Earlier in his career, he also briefly worked at a philanthropically focused investment fund established by former FTX founder Sam Bankman-Fried.