Betting Right on the Decade-Long Grand AI Narrative, Killed by Leverage Liquidation: The Billion-Dollar Blowup of US Stocks' "Child of the Version" Leopold

Leopold Aschenbrenner’s AI-infrastructure fund, Situational Awareness, was hit by another forced deleveraging after its concentrated bets on memory and compute names reversed sharply. The fund had returned 439% in the first half of the year, with SanDisk and Micron accounting for about 55.6% of disclosed U.S. equity holdings at the end of June, before a July chip selloff and margin calls drove a 67% monthly loss and the sale of most listed positions to Citadel, which unloaded over 80% of the risk in under three weeks for more than $4 billion. JPMorgan cut off the fund’s lending in September, pushing Aschenbrenner into out-of-the-money call options on AMD, Bloom Energy and CoreWeave. From June highs to Nov. 5, CoreWeave fell 65% and Core Scientific 60% as Democratic midterm wins and state-level data-center pushback triggered a repricing of AI infrastructure stocks. The episode matters because the fund’s thesis—buying the picks and shovels of AI buildout—may prove right while short-dated leverage proves fatal; investors will watch whether other leveraged AI-infrastructure holders face similar margin pressure.