As of: 2026-10-17 07:29 CEST.
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# How to lose $35 Billion Dollars Betting on AI

ColdFusion, 16 September 2026, YouTube. 1,349,643 views as of 17 October 2026.
Kind: Review.
Watch: https://www.youtube.com/watch?v=7K_sA6o1dOE

## Why it is here

ColdFusion's 22-minute documentary on Leopold Aschenbrenner, whose AI hedge fund (Situational Awareness) grew to what the video calls a $45 billion empire and then suffered a catastrophic loss when the market turned, and what that says about the AI frenzy in financial markets. The dollar figures are ColdFusion's, not checked here. About 1.35M views; missed for a month and found on 2026-10-17 on the ColdFusion channel page.

## Description (written by Gemini from the video)

**Summary**  
Dagogo Altraide of ColdFusion examines the rapid rise and sudden multi-billion-dollar unwind of Leopold Aschenbrenner’s hedge fund, Situational Awareness LP. The video chronicles how the 24-year-old former OpenAI researcher scaled his fund from $225 million to $45 billion on high-conviction AI bets, before losing approximately $35 billion within weeks in July 2026 due to extreme leverage and an unexpected market swing.

**What is shown**  
* **[00:04] – [02:13] Introduction**: Dagogo details Leopold Aschenbrenner's background, his wedding weekend in Carmel, California, and the sudden margin calls forcing the liquidation of his fund.  
* **[02:14] – [05:30] Vows and Margin Calls**: Background on Aschenbrenner’s June 2024 paper *Situational Awareness: The Decade Ahead*, his previous roles at FTX's philanthropic arm and OpenAI's Superalignment team, his controversial firing in April 2024 over security memos, and subsequent public attention following his Tim Ferriss podcast appearance.  
* **[05:31] – [06:40] Fund Launch & Backers**: The launch of Situational Awareness LP with early backing from tech figures including Patrick and John Collison, Nat Friedman, and Daniel Gross.  
* **[06:41] – [09:31] Rise of the Wonderkid**: Review of *Fortune* profiles, Tyler Cowen calling him an "economics prodigy", early academic milestones, and archival footage of philosopher David Chalmers discussing recursive AI self-improvement in 1996.  
* **[09:32] – [11:17] Sponsor Segment**: Demonstration of the Wispr Flow voice-to-text dictation application across mobile and desktop workflows.  
* **[11:18] – [14:06] The Plan**: The mechanics of the fund's trade—going long on physical AI infrastructure (such as SK Hynix, CoreWeave, and Nebius) and shorting enterprise SaaS (such as Adobe and Salesforce) using 400% leverage (4:1), followed by the July 2026 market reversal when Chinese open-weight models triggered an AI hardware selloff and a software squeeze.  
* **[14:07] – [16:08] Cleaning the Wreckage**: Margin calls from prime brokers (Goldman Sachs, JPMorgan Chase, Bank of America), the emergency block sale of approximately $16 billion in stock to Citadel at a 10%+ discount on July 30, 2026, and the survival of an illiquid $5 billion private stake in Anthropic.  
* **[16:09] – [19:49] The Leverage Trap**: Analysis of leverage risks, volatility decay, and portfolio sizing referencing hedge fund manager Cliff Asness and the Kelly criterion.  
* **[19:50] – [22:21] Conclusion**: Reflection on current AI developments (including references to GPT-6 Astra and model architectures), the boundary between conviction and risk management, and recent reporting that JPMorgan cut off lending to the fund.

**Claims & numbers**  
* The presenter says Leopold Aschenbrenner launched Situational Awareness LP with $225 million and grew it to manage roughly $45 billion within two years.  
* The presenter states that the fund lost roughly $35 billion over a two-week period in July 2026, shrinking from $45 billion to approximately $10 billion.  
* The presenter claims the fund operated with roughly 400% leverage (4 to 1 gross exposure).  
* The presenter reports that between peak and trough in July 2026, the fund's top long positions dropped between 50% and 77.5% (including Nebius down 50.6%, Bloom Energy down 53.4%, SanDisk down 56.9%, CoreWeave down 60.3%, SharonAI down 77.5%, and IREN down 61.8%), while shorted software rallied (e.g., Adobe squeezed up 28%).  
* The presenter claims Citadel acquired approximately $16 billion of Situational Awareness's public stock portfolio in an overnight block sale on July 30, 2026, at a discount exceeding 10%.  
* The presenter states that the fund's surviving value rested on an estimated $5 billion illiquid, private stake in Anthropic.  
* The presenter notes that days after the Citadel deal, Aschenbrenner wired $400 million into an unnamed private company after previously investing $100 million into it.  
* The presenter mentions testing GPT-6 Astra and observes that incorporating a loop token process has improved model architecture.

**Notable quotes**  
* **[02:20]**: *"You can see the future first in San Francisco."*  
* **[09:14]**: *"What happens if you're wrong?"*  
* **[19:29]**: *"You never go full Kelly."*

**Assessment**  
This is a documentary-style retrospective and financial analysis video combining news clips, podcast interviews, public filings, and on-screen graphics. The commentary is grounded in published reporting and financial analysis, though the narrative heavily synthesizes third-party journalistic accounts (such as reports from the *Wall Street Journal*, *Bloomberg*, *CNBC*, and *Fortune*) rather than original investigative records.

_Described by gemini-3.8-flash on 2026-10-17 from the video's audio and frames._

## Related

- 2026-07-30: [Leopold Aschenbrenner's AI hedge fund Situational Awareness sells its public stock book to Citadel after July AI-stock rout](https://postcutoff.com/e/2026-07-30-situational-awareness-fund-fire-sale/)

## People in it

- [Daniel Gross](https://postcutoff.com/person/daniel-gross/), Executive at Meta (ex-Apple)
- [Leopold Aschenbrenner](https://postcutoff.com/person/leopold-aschenbrenner/), Founder, Situational Awareness LP
- [Nat Friedman](https://postcutoff.com/person/nat-friedman/), Head of product, Meta Superintelligence Labs