Leopold Aschenbrenner Returns to AI Trading With New Losses

Leopold Aschenbrenner is back in the spotlight, but not for the reasons he might have hoped. Six weeks after his fund, Situational Awareness, suffered one of the largest dollar losses in hedge fund history, the manager is back to trading AI stocks. Reports surfaced Friday that Aschenbrenner spent early September buying options on several tech companies, including AMD and Bloom Energy, in an attempt to rebuild his portfolio.

The timing for this comeback proved unfortunate. By the time markets opened on Monday, the new positions had dropped between 5% and 8%. This slump followed a broader market sell off triggered by warnings from industry leaders regarding the rapid growth of frontier AI. Market analysts noted a general rotation away from crowded tech trades, leaving Aschenbrenner's latest bets underwater almost immediately.

Aschenbrenner previously gained attention in 2024 by using high levels of leverage to grow his fund to over $45 billion before a market correction in July wiped out most of those gains. While he has shifted his strategy toward using options to limit his risk, the immediate drop in his new positions suggests he is still struggling to time the volatile AI sector correctly.

Investors and market observers will be watching closely to see if Aschenbrenner can sustain this new approach or if the fund will face further pressure. As the tech sector navigates these warnings and shifting sentiment, the performance of the Situational Awareness fund will remain a major talking point for those tracking the high stakes world of AI investments.