Nostradamus of AI Leopold Aschenbrenner didnt have the crystal ball seeing hedge fund portfolio dip 67%
The celebrated crystal ball of the “Nostradamus of AI” hasn’t merely gone cloudy — it has rolled off the table and shattered on the parlor floor.Wall Street breathed a huge sigh of relief last week as an AI-focused hedge fund called Situational Awareness reportedly sold most of its portfolio — reportedly down 67% last month on the backfiring of debt-fueled bets on chipmakers and assorted artificial-intelligence firms — to billionaire Ken Griffin’s Citadel.While the rescue quelled fears of a forced liquidation of the $20 billion fund that could tank the markets, it nevertheless left trading desks across town asking the same question: Is this the canary in the coal mine?Are we finally seeing the start of the dot-com bubble of AI?The prevailing sentiment was best summed up by a veteran Wall Street sage who has seen a lot of flameouts in his day.Let’s just say he wasn’t impressed by Leopold Aschenbrenner, the 25-year-old German-born “Nostradamus” figure who is the founder of Situational Awareness.
(Great name for an organization in dire need of a wake-up call, by the way.)“Just your typical leveraged idiot who was right until he was wrong,” the source said, adding that the implosion is a “one-off.”Another source waxed slightly more poetic: “Ah, yes — a 25-year-old kid who’s a billionaire on paper because of a bubble.Everybody thinks they can raise a fund but they forget about how hard it is to be a good fiduciary.”Still, a third trusted source felt there was room for conversation: “A significant issue.
Not viewed as systemic right now.I wonder if that changes as more problems arise.”Indeed, the fact is that most of Wall Street is closely monitoring the Situational Awareness situation because they were holding many of the same positions as Aschenbrenner.Another top hedge fund manager I won’t name tells me he has been getting crushed on similar investments in chipmakers essential to the AI supply chain, as well as other c...