Gen Z AI star Leopold Aschenbrenner's $57b hedge fund faces meltdown weeks after soaring debut

Dubbed the "Nostradamus of AI", Leopold Aschenbrenner, 24, built a reputation for making bold predictions about artificial intelligence and its future.

But the young entrepreneur is now facing a major setback after his artificial intelligence (AI)-focused hedge fund, Situational Awareness, suffered heavy losses.

The fund has unwound much of its portfolio after a sharp downturn, CNBC reported on Thursday (July 30). Citadel later bought its publicly traded assets after discussions between Aschenbrenner and Citadel founder Ken Griffin, according to CNBC and the Financial Times.

Prior to the sharp losses, Aschenbrenner's hedge fund reportedly grew to as much as US$45 billion (S$57 billion).

Propelled into glory

Before helming the hedge fund, Aschenbrenner was a rising star in the AI world. 

Born in Germany, he graduated from Columbia University as valedictorian at just 19 and later joined OpenAI's Superalignment team, which focused on the long-term safety of advanced AI systems.

Aschenbrenner was fired from OpenAI in 2024 after the company alleged that he shared internal information with external researchers. He has disputed that characterisation.

In June that year, the AI tech whiz wrote and published a 165-page essay titled "Situational Awareness" that highlighted the importance of AI and its impact upon the economy, among other technology-driven predictions for the future.

He then founded his hedge fund - without prior experience in investing - which was backed by prominent investors and grew rapidly before the recent crash, MSN reported.

Even as losses mounted, Aschenbrenner remained optimistic. In a letter to investors on July 24, he described the decline in his technology-related investments as a buying opportunity, Investing.com reported.

"At times we call out opportunities that seem like a particularly good time to add funds, if you have been waiting for one," he reportedly wrote.

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khooyihang@asiaone.com