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- Hacker News
- Incredible that the founder is engaged to be wed this very weekend to the chief of staff to Anthropic's CEOby redwood
- I found a tweet purporting to show the letter that Leopold sent to his LPs - it looks pretty thoughtful and doesn't sound as bad as some news sources seem to be portraying.by sudb
- What exactly do you think he's gonna tell his clients? "Oops haha I'm a fraud"by bagacrap
- I don't understand why this thing is called a hedge fund. Usually, a hedge fund makes many non-correlated bets across many markets (commodities, stocks, bonds, public and private markets).
This guy made exactly one bet, which is that AI would eat software (long AI hardware stocks, short Adobe etc), leveraged it to the tits, and kept adding more leverage even as the trade moved in his favor.
Where is the "hedge"? Normally we just call this a "fund".
by bagacrap - Where do I sign up to get $100M to dump into long AI positions?by foltik
- Alternative to archive.ph
No Javascript required, no CAPTCHA, text-only, HTTPS optional
tnftp -4o"|grep -o '<p.*</p>' \ |tr -d '\134' \ |sed '1s/^/<meta charset=utf-8>/'" \ https://assets.msn.com/content/view/v2/Detail/en-in/AA296NRC > 1.htm firefox ./1.htm #links 1.htm #elinks 1.htm links -dump \ https://assets.msn.com/content/view/v2/Detail/en-in/AA296NRC \ |sed '1,/body\"/d;/readTime/,$d' \ |less -r - Earlier on HN:
Martin Shkreli breaks down the collapse of Situational Awareness - https://news.ycombinator.com/item?id=49119380
Edit: added context
by alasr - Why are you promoting content by Martin Shkreli? You know, the guy who committed securities fraud to rip off desperate patients?by malfist
- I like how Matt Levine formulated it.
His thesis was correct. The problem is, his thesis was measured in years if not decades when his funding was measured in days and hours.
by ymolodtsov - I mean that's always the case... we all know that stocks in general are going to be up 30 years from now. But we don't all leverage up 400%.by bagacrap
- >Even including July's losses, the fund remains up about 80% on the year
Spectacular blowup and a lesson on leverage, but let's not miss this line.
by asats - It's hopeless, people see what they want to see.by bpodgursky
- Well micron is up 165% on the year so he could have just bought a single stock and done a lot better. The point being that you wouldn't consider someone a genius if they did that, just lucky.
Not sure why anyone thought he was a brilliant investor to begin, as there's always going to be at least one investor of all the millions out there who makes a radical bet and is up 1000%, just like powerball has winners.
by bagacrap - You’re missing the core story which is that they don’t have a returns crisis they have a liquidity crisis. Finds don’t blow up because they have bad returns. Funds implode because they have no cash to cover their calls and other needs for cash.by cmiles8
- > Aschenbrenner party blamed short sellers who targeted the firm’s positions for exacerbating the fund’s losses, the letter said. The letter compared Situational’s experience to a bank run.
4 years ago, it was SBF blaming Changpeng Zhao for shorting FTT and triggering a run on FTX.
Now another EA has followed the path of making a lot of money relatively quickly and losing it just as fast, using the exact same arguments for why it happened.
by scrlk - >Now another EA has followed the path of making a lot of money relatively quickly and losing it just as fast
let's be clear here - he didn't actually "lose" a ton of money. he was up 439% net in the first half of 2026.
his issue was getting margin called due to being short on software (which went up) and long on AI infra (which went down) - getting margin called != losing money.
- Sounds like someone took huge risks, incurred huge losses, and thought they were entitled to always win. It honestly feels good seeing these folks get knocked down a peg.by RIMR
- He had to liquidate everything that’s liquid and is left, seemingly, with some iffy-looking things that have paper returns but are broadly illiquid. Thats a disaster for a fund no matter how you slice it.by cmiles8
- Even Wirecard – a fraudulent German bank missing some billions of euros and run by a Russian spy – always blamed bad press.
Denials mean nothing.
by stephbook - >Now another EA has followed the path of making a lot of money relatively quickly and losing it just as fast, using the exact same arguments for why it happened.
I would be very interested to know what he did with the management and performance fees (and how much they were) he gathered over the last 3 years. Just the perf fees from 2025 are probably enough to set him up for life. If he reinvested not so great.
by mamonster - An inexperienced portfolio manager that’s never seen a down tech market in his life has created a massively leveraged position on frothy assets in a bubble and the bubble is looking ill. What could possibly go wrong.
Many of these AI plays are massively entangled and leveraged. It all looks good until it doesn’t and when there’s a hiccup things unravel quickly and exponentially. I fully expect in the next 12 months we’re going to see some rather spectacular investment implosions with folks losing their shirts. Get your popcorn ready.
by cmiles8 - > What could possibly go wrong
A barometer of the mania and one for the history books. A 23 year old wunder-kind publishes a 156 page prophesy with a catchy title which was lapped up by the silicon valley elite and funded to the tune of 10s of Billions. And, not sticking to his lane, the wunder-kind enters the finance world thinking his brilliance translates there too, and he was promptly taken to the woodshed by the wall street sharks.
by bwfan123 - I'd be excited for the show myself if I had any idea how to prevent my portfolio from tanking when this clusterfuck finally unravels.
- This is everywhere. For reference, former FTXer and OpenAIer raised $225m into a hedge fund structure, went long and short, and reportedly peaked at $40bn of value; leverage bit hard this week and they sold their entire-ish portfolio to Citadel at $10bn. (Which, I imagine was very likely aiming at this outcome in their trading in the last few weeks).
Not reported anywhere -- was additional money raised in to the fund, and what is the LP basis? The story might be: wunderkind 40x+ed his first hedge fund and sold it to Citadel, or it might be: wunderkind raised $20bn and turned it into $10bn fast trading against Citadel.
Inquiring minds want to know!
by vessenes - Wow, so, he narrowly avoided prison while at FTX, then went to work for Scam Altman, now does "investment funds" (a classic trope).
The guy really really really wants to end up in prison, lol.
by moralestapia - Say more about how citadel made this happen with their trading?
- He claims 80% ytd profits, and there are speculations that Citadel got their whole public portfolio, so the remaining 10-15b are all private (and marked in unknown way) including ~5b in Anthropic, those who invested early in the year probably still in green (assuming there is liquidity for other private investments, which probably there is given it's AI stuff)by EvgeniyZh
- If you owe someone 10 thousand dollars that’s a big problem for you. If you owe someone 10 billion dollars that’s a big problem for them
- Per another WSJ article: https://www.wsj.com/finance/leopold-aschenbrenner-situationa...
"The fund had gained about 270% after fees this year through May. At that point, it was up more than 1,000% after fees since inception. It had ballooned to well over $20 billion under management, reaching the size of other well-known hedge funds that took decades to build."
So, down 67% in July but that was after already being up more than 1000% from the beginning up through May.
https://www.marketwatch.com/story/pioneering-ai-hedge-fund-w...
> "Research boutique Citrini posted some commentary on the potential developments at Situational Awareness on X Thursday. The post sought to downplay the gravity of the situation and opined that investors are likely to give Aschenbrenner the benefit of the doubt. “To put that into perspective, if you invested $100M with SALP at inception and wiped out ninety percent in July, your investment would be worth $230M,” said Citrini."
by mrandish - You’re talking about the same fund.
They were open about their gains. It was the margin calls and illiquidity that got them, not going negative. Some of their assets, like Anthropic stock, isn’t worthless, it’s just illiquid.
by tyre