元OpenAI社員が設立したヘッジファンド「Situational Awareness」の破綻と教訓

I am not by any means an expert at finance but I think I do now have some advice for people who are: Do not name your hedge fund anything that will be hilarious if it blows up. Don’t use a name like “Long-Term Capital Management,” or “Amaranth Advisors” (named for the floral symbol for immortality). Certainly do not call yourself “Situational Awareness,” which might as well just be “Hubris, Inc.”

Anyway, Situational Awareness, the hedge fund started by a 24-year-old former OpenAI employee that focuses on artificial intelligence bets, has sold most or all, depending on who’sreporting, of its entire public stock portfolio to Ken Griffin’s Citadel after several bad weeks for AI stocks, and that’s the situation we are all now aware of. You may recall earlier this week I noted the market had gotten particularly nervous about AI risk; as it turns out, we have discovered one firm that was swimming without a bathing suit.

How bad is it? Well, according to CNBC, the fund was worth $45 billion at the start of July. It is now worth $10 billion, after the sale of assets to Griffin. The previous record-holder on all-time trading losses was Archegos Capital Management, which lost $8 billion in ten days in 2021, according to *The Wall Street Journal*. If these numbers hold, Situational Awareness’ AI bets lost three times as much.

Every detail of this disaster is funnier than the last. Situational Awareness had a staff of eight, of whom *four* were investment professionals. “The fund’s largest holdings at the end of the first quarter included Nebius Group, Sandisk, Micron and CoreWeave, according to filings,” CNBC wrote. “All four of those stocks are down more than 35 percent this month.” I expect we will hear more in the coming days, especially from the Wall Street professionals who were on the other side of these jokers’ trades.

“Basically, this investment firm will be kind of like a brain trust on AI.”

How did we get here? Situational Awareness LP was named for a series of facile essays about machine intelligence published by the improbably-named Leopold Aschenbrenner, the 24-year-old mastermind of the hedge fund. “We are building machines that can think and reason,” he writes, betraying that he has no idea what thinking could possibly mean. “By 2025/26, these machines will outpace many college graduates. By the end of the decade, they will be smarter than you or I; we will have superintelligence, in the true sense of the word. Along the way, national security forces not seen in half a century will be unleashed, and before long, The Project will be on. If we’re lucky, we’ll be in an all-out race with the CCP; if we’re unlucky, an all-out war.”

There is a part of me that wants to go line-by-line to dunk on every claim here, beginning with the very first sentence, “You can see the future first in San Francisco,” but I am going to stifle the impulse. The essays are the theoretical underpinnings of the hedge fund. The upshot is that artificial general intelligence is real (lol) and will arrive in 2027 (lmao). So the entire point of the hedge fund was to dump as much money as possible into AI stocks and then get very, very rich.

“Basically, this investment firm will be kind of like a brain trust on AI,” Aschenbrenner told Dwarkesh Patel in a four-hour podcast interview, the preferred intellectual medium of the Silicon Valley elite. “We’re going to have way more situational awareness than any of the people who manage money in New York. We’re definitely going to do great on investing, but it’s the same sort of situational awareness that is going to be important for understanding what’s happening, being a voice of reason publicly, and being able to be in a position to advise.”

I really cannot begin to explain how much this essay’s bad graphs impressed A Certain Kind of Silicon Valley Guy. *Axios* wrote breathlessly about the essay that “his opus is a useful, eye-opening synthesis of high-level Silicon Valley conversations.” Aschenbrenner’s insights “expanded my perspective as an AI practitioner beyond just the technical aspects,” wrote Shav Vimalendiran, a co-founder of SAMMY Labs, an AI company that is meant to simplify legal statutes. You know who else liked it? Ivanka Trump, who called it “an excellent and important read.”

Why would these purportedly serious people buy in on a 24-year-old’s very first hedge fund?

Situational Awareness’s backers included Patrick and John Collison, who cofounded Stripe, and two Meta AI leaders, Daniel Gross and Nat Freedman. The fund’s director of research was Carl Shulman, who’d worked at Peter Thiel’s Clarium Capital. Eventually, Jane Street — the Wall Street firm budding young Effective Altruists, including Sam Bankman-Fried, join — bought in too. “Jane Street’s investment in Situational Awareness is particularly notable because the firm rarely allocates capital to outside money managers,” The Wall Street Journal wrote in June.

Why would these purportedly serious people buy in on a 24-year-old’s very first hedge fund? My best guess is that Aschenbrenner’s investors were relying on the social bonafides he had cultivated. Social proof is the laziest and most disastrous way to vet people — ask any Theranos investor, or for that matter, anyone who had Bernie Madoff managing their money — but I suppose it’s good enough for Silicon Valley.

At age 17, Aschenbrenner was called “an economics prodigy” by Tyler Cowen, a libertarian economist famous in certain Silicon Valley circles. Cowen’s Emergent Ventures even gave him a grant, according to *Fortune*. Aschenbrenner published essays in Works in Progress, a publication funded by Stripe. During his time at Columbia University, Aschenbrenner cofounded the college’s Effective Altruism chapter. After graduating in 2021 as Columbia University’s valedictorian at age 19, Aschenbrenner went on to work at the FTX Future Fund, the philanthropic arm of cryptocurrency exchange FTX, which collapsed after Sam Bankman-Fried’s fraud was revealed. Among his coworkers at the fund were William MacAskill, the philosopher-king of the Effective Altruism movement, and Avital Balwit, who would later become the Chief of Staff at Anthropic.

From there, he immediately got a job on OpenAI’s superalignment team. *Fortune* quotes several former coworkers who describe him as being “politically clumsy,” arrogant and abrasive. “Multiple researchers also described a holiday party where, in a casual group discussion, Aschenbrenner told then Scale AI CEO Alexandr Wang how many GPUs OpenAI had—’just straight out in the open,’ as one put it,” wrote Fortune’s Sharon Goldman in her profile. (Both Wang and Aschenbrenner deny this occurred.) Aschenbrenner was later fired from OpenAI for leaking internal information in an incident unrelated to the Scale AI thing. Two months after that, Aschenbrenner published *Situational Awareness*, his essays.

“Obviously, not blowing up is task number one and two.”

Now astute readers may notice that Aschenbrenner had no previous money management experience on his resume when he launched his hedge fund. They may also notice that the sum total of Aschenbrenner’s work experience was a few months at FTX and about a year at OpenAI. They may wonder if this means that the Collisons, Gross, and Freedman have too much money to burn if they are funding this little shit. (Yes, obviously. Tax the rich!)

Here’s how Aschenbrenner described the fund’s strategy back in the halcyon days of 2024: “Obviously, not blowing up is task number one and two,” he told Patel. “You have to get the timing right. The sequence of bets on the way to AGI is actually pretty critical. People underrate it.”

We’ll get a more complete picture of how Situational Awareness crashed and burned in the coming days, but right now it looks like this. Hedge funds often borrow money to maximize their bets. So if you really believe AI is the future, “you won’t put 100% of your money (and your investors’ money) into the AI boom,” writes Bloomberg’s Matt Levine. “You’ll put, like, 300% of your money into the AI boom.” At one point, the hedge fund claimed to be up 439 percent.

The same borrowing that magnifies your wins also magnifies your losses. If you have borrowed money to bet on AI stocks, and those stocks go down — as they have done recently — the people you borrowed from will do what’s called a “margin call” and ask you to top up your loan collateral. First, Situational Awareness held calls with its investors and lenders to raise more capital, *The Financial Times* reported yesterday. It even offered some investors the opportunity to buy parts of its portfolio. This morning, Situational Awareness sold what the *FT *said was “a large portion of its $16bn public equity” to Citadel, Griffin’s hedge fund.

“You’ve got to be really, really careful about your overall risk positioning.”

Public equity is the most liquid part of anyone’s portfolio. Situational Awareness still has private holdings, including $5 billion in Anthropic, the *FT* reported. According to CNBC, Situational Awareness was also negotiating to sell that stake, “but it wasn’t clear if that deal was done.”

“You’ve got to be really, really careful about your overall risk positioning,” Aschenbrenner said in 2024. “If you expect these crazy events to play out, there’s going to be crazy things you didn’t foresee.” One of those things, perhaps, is that artificial general intelligence isn’t coming — or at least, not by 2027. “A friend joked that the investment firm is perfectly hedged for me,” Aschenbrenner said. “Either AGI happens this decade and my human capital depreciates, but I turn it into financial capital, or no AGI happens and the firm doesn’t do well, but I’m still in my twenties and smart.”

Yes, Aschenbrenner is certainly in his 20s!

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• Elizabeth Lopatto

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