Ex-OpenAI researcher built a $45 billion AI hedge fund – It all melted down during his wedding week

The German-born artificial intelligence researcher and investor went viral ahead of his own wedding weekend for an entirely unrelated and possibly the worst reason. The 24-year-old, who was once part of OpenAI’s “Superalignment” team, had become the face of an AI-themed hedge fund – named Situational Awareness – in recent years. Just this month, his fund scored a milestone every investment firm hopes to achieve: a staggering growth in the billion-dollar ballpark, only to lose sizeable holdings to a rival company.

It all came crashing down for the wunderkind investor’s powerhouse within days of hitting a $45 billion peak in assets. Dubbed the ‘Nostradamus of AI,’ Aschenbrenner’s tumbling fall took an even more dramatic turn because it happened the same week he was planning his wedding to Avital Balwit, chief of staff to Anthropic CEO Dario Amodei.

By Thursday, holdings of the German researcher’s investing giant, which has primarily been buying stocks in the AI trade, plummeted to around $10 billion, according to a CNBC report, citing people familiar with the development.

Given his fund’s risky strategy of borrowing money to buy stocks (including those tied to SK Hynix, CoreWeave and SanDisk), a massive fall in AI stocks over the past month took a heavy toll on Situational Awareness, once again turning Aschenbrenner into a cautionary tale.

As his fund lost 67% this month after swelling to $45 billion at the start of July, his company was forced to find a much-needed solution in offloading consequential investments at grave discounts to industry rival Ken Griffin’s Citadel.

How Leopold Aschebrenner’s OpenAI past led to his hedge fund

This is not the first time the 20-something hedge fund founder has become a walking-and-breathing warning in a world governed by money. Having launched his fund in early 2025, the wunderkind faced the heat over his lack of money management experience.

And so, Aschenbrenner’s prior meteoric rise may as well be documented as what the new-gen audiences may describe as “pure cinema,” especially owing to the drama that appears to constantly define him and his professional trajectory.

In 2023, the German techie landed a job in Sam Altman’s artificial intelligence startup, OpenAI’s Superalignment team. The man tasked with keeping AI aligned with human interests was fired by the company the following year over what it described as improper disclosure of internal information. Aschenbrenner has long contradicted the claims that will always come back to scar his professional resume, saying that he merely shared a mostly nonconfidential document with external researchers for feedback over concerns about OpenAI’s security practices after a hacker breached its internal systems.

One would think such a massive hit to a man’s career would set him back by years. Regardless of how polarising the tech world may view him as, Leopold Aschenbrenner – a Columbian University valedictorian at 19 – however, turned the same year (2024) of his professional downfall into a breakthrough for himself.

Weeks after leaving OpenAI, he channelled his brief time at the up-and-coming AI empire into a 165-page piece of writing that mapped out artificial intelligence’s path ahead. He titled his 2024 identity-defining essay “Situational Awareness,” which eventually became the namesake for his investment firm founded that very year on the inspirational foundation that “I will be the dominant driver of global market returns over the next decade,” according to the firm’s website.

He laid the groundwork for his hedge fund in July 2024 by raising a reported $225 million, with prominent Silicon Valley figures, including payment processor Stripe’s co-founders Patrick and John Collision, ex-GitHub CEO Nat Friedman and AI leader Daniel Gross emerging as Situational Awareness’ investors.

Letter to investors

Addressing the tragic turning of tables for Situational Awareness in a letter to his fund’s partners and investors, Leopold admitted in the opening remarks: “We let you down this month.” Making it his mission to ensure that necessary lessons are grasped from the experience, he took full responsibility for July’s events, as quoted by Business Insider.

“To be clear, this should rightly have been a very painful month in terms of the performance of our fund: when AI stocks draw down dramatically while AI technical/business fundamentals are improving, you should expect our fund to be down a lot. We embrace volatility. But it should never jeopardize the fund,” he wrote to partners.

“The fund was not shut down, liquidated, or transformed into a private-only fund. We are continuing to operate as a hybrid public-private fund as before. However, we will manage our public book on a fully-paid-for basis while we draw the lessons from these developments. Most importantly: we took the steps that were necessary to fight another day.“

The German investor conceded that AI’s intensification of market volatility had indeed left them to deal with “expensive scars.”

Laying down the steps ahead and his role in it all, he told everyone, “On the portfolio itself: we are very optimistic about the current investment opportunity set. The underlying fundamentals are accelerating at the very same time that prices have declined significantly.”

“Thank you for your patience and your partnership. I am fully invested alongside you—virtually all of my capital is in the fund—and I intend to work relentlessly to demonstrate that the events of this month have made me a wiser and stronger investor. I am available next week for 1:1 phone calls with each of you to discuss all of the above.”

Leopold Aschenbrenner’s story becomes a cautionary tale

Known for having written what some have touted as the “AI-boom bible,” Leopold Aschenbrenner grew up alongside physician parents in Berlin. He eventually moved to the US for higher studies.

Before graduating from Columbia University in 2021 at age 19 and setting foot in California, the AI pioneer skipped several grades in the German school system. The fast-forward route led him to graduate high school early at age 15. Given his deep insights into math and computer science, he penned an attention-grabbing 85-page paper titled “Existential Risk and Growth” at Columbia.

“Technological innovation can create or mitigate risks of catastrophes— such as nuclear war, extreme climate change, or powerful artificial intelligence run amok—that could imperil human civilisation,” read the first few lines of his paper’s abstract.

“…we could be living in a unique ‘time of perils,’ having developed technologies advanced enough to threaten our permanent destruction, but not having grown wealthy enough yet to be willing to spend much on safety,” he went on in the Columbia paper. “Accelerating growth during this ‘time of perils’ initially increases risk, but improves the chances of humanity’s survival in the long run. Conversely, even short-term stagnation could substantially curtail the future of humanity. Nevertheless, if the scale effect of existential risk is large and the returns to research diminish rapidly, it may be impossible to avert an eventual existential catastrophe.”

In yet another ironic twist, the continuing message embedded in his collegiate writing dramatically reflected itself in the perilous situation that struck Achenbrenner and his present-day hedge fund this week. One could argue that his years-old essays only further confirm his foresight as a visionary.

On the other hand, it equally makes a case for his own limitations despite having such an expanse of knowledge at his beck and call. Even a few of his Columbia classmates attest to that inference.

Sofia Montrone, who was salutatorian, only crossed paths with Aschenbrenner on a Zoom call shortly before their 2021 graduation, told CNBC that she found her batchmate “childlike” and socially awkward.

Columbia’s then-valedictorian echoed similar thoughts about himself in a 2021 podcast conversation. “Coming from Germany, one thing I learned was the work ethic, the discipline. The other thing was really embracing the weirdness and the disagreeableness,” he said at the time. “Where in Germany it was always about, no, you should be like everybody else.”

During his time at Columbia, Leopold co-founded the elite school Effective Altruism (EA) chapter, based on the same philosophical movement championed by quite a few tech leaders, including Sam Bankman-Fried, his future boss.

The multiple chapters of professional collapse in Aschenbrenner’s life trace back to the early 2020s. Right after graduation, he started working for the philanthropic arm of Sam Bankman-Fried’s crypto exchange FTX, before it went bankrupt in 2022. Upon its collapse, he quit alongside other staffers. While the former workplace may not have been professionally fruitful, he at least scored a huge personal win, finding his future wife at FTX.

As anyone would tell you, it was never Aschenbrenner’s intention to be at the centre of crumbling empires; rather, he’s been warning others against it in numerous written pieces and interviews.

In a rare public appearance on his friend Dwarkesh Patel’s podcast in 2024, the AI whiz was even asked about “blowing” things up despite possessing the knowledge to avert a crisis.

“Presumably, you’ve thought about the ways in which these kinds of things can blow up,” Patel said. “There’s a lot of interesting business history books about people who got the thesis right but timed it wrong.”

Little did Leopold know back then that his own story would shape into a forewarning down the line. And so, he simply replied then, “Obviously… Not blowing up is task No 1 and 2.”

Disclaimer: This is an independent profile. While Leopold Aschenbrenner and his representatives were not contacted prior to this article’s publication, it was reported using publicly available records, sources and news reports where applicable. This content was produced in accordance with FinancialExpress.com’s editorial guidelines.