AGI's Paradox: 23-Year-Old's Fund Bets on AI's Threat and Opportunity

A 23-year-old former OpenAI researcher, Leopold Aschenbrenner, has captured global attention with his $1.5 billion hedge fund, Situational Awareness LP, which bets on the imminent arrival of artificial general intelligence (AGI). The fund, launched in 2024, has delivered a 47% return in the first half of 2025, outpacing the S&P 500's 6% gain. Aschenbrenner's strategy centers on long positions in AI infrastructure companies-semiconductors, data centers, and power providers-while shorting sectors deemed lagging in the AI transition . His thesis, outlined in a 165-page manifesto titled Situational Awareness: The Decade Ahead, argues that AGI will transform the global economy and that the U.S. must outpace China in the AI arms race to secure economic dominance .

Aschenbrenner's meteoric rise began with a controversial career path. After interning at Sam Bankman-Fried's now-defunct FTX Futures Fund, he joined OpenAI's superalignment team in 2023, where he was fired in April 2024 over alleged data leaks. Undeterred, he published his manifesto shortly after, which went viral and positioned him as a prescient voice in AI governance circles. The document drew comparisons to George Kennan's "Long Telegram" for its urgent call to action, warning that the U.S. risked falling behind in AGI development . Investors, including Stripe co-founders Patrick and John Collison, Meta's Daniel Gross, and former GitHub CEO Nat Friedman, swiftly backed his hedge fund, which now holds stakes in Intel, Broadcom, and Core Scientific .

The fund's success has fueled debates about the ethics of profiting from AI hype. Critics argue that Aschenbrenner repackages safety concerns into investment pitches, potentially exacerbating the U.S.-China AI race . Conversely, supporters liken his approach to that of Michael Burry, who profited from the 2008 housing crisis by identifying undervalued risks. Graham Duncan, a veteran investor and Situational Awareness advisor, praised Aschenbrenner's "variant perception" in navigating AI's uncertainties, noting his early buy-in during a market sell-off triggered by China's DeepSeek LLM release . The fund's performance, however, has also drawn scrutiny over whether skill or timing explains its gains, particularly after a $459 million Intel call option position proved prescient as shares surged post-federal investment .

Financial institutions are increasingly sounding alarms about an AI-driven market bubble. The Bank of England and IMF have warned that inflated valuations for AI-focused tech firms-now accounting for 40% of the S&P 500-could lead to a sharp correction if AGI fails to deliver on its promises . Kristalina Georgieva, IMF Managing Director, compared current valuations to the 2000 dotcom bubble, emphasizing the risk of overinvestment in speculative AI ventures . Meanwhile, OpenAI's Sam Altman acknowledged short-term volatility but remained confident in AI's long-term economic potential, stating, "Over the arc we have to plan over, we are confident this technology will drive a new wave of unprecedented economic growth" .

Aschenbrenner's story encapsulates the paradox of AI investing: a blend of visionary foresight and opportunism. While his fund's returns have validated his AGI thesis in the short term, the broader implications of his narrative-framing AGI as both an existential threat and a financial opportunity-remain contentious. As financial regulators and policymakers grapple with the AI bubble, Aschenbrenner's rise underscores the power of storytelling in shaping markets, even as the technology's true potential remains unproven.

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: Fortune (https://fortune.com/2025/10/08/leopold-aschenbrenner-openai-ftx-1-5-billion-hedge-fund-situational-awareness/)

: PYMNTS (https://www.pymnts.com/news/artificial-intelligence/2025/former-openai-researcher-launches-1-5-billion-ai-focused-hedge-fund/)

: Sharon Goldman Substack (https://sharongoldman.substack.com/p/behind-the-reporting-the-improbable)

: AP News (https://apnews.com/article/ai-bubble-warnings-bank-of-england-imf-b15e54f6d06992371ee39b27f4e6da3a)