Leopold Aschenbrenner - Inside The $45B AI Bet That Unravelled

**SPEAKER_1** (0:00)
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**Patrick Bet-David** (0:30)
A story of a guy named Leopold Aschenbrenner. Okay, very interesting story. Let me tell you what happened with this story. This guy, born in Germany, at 15 years old, he's a phenom, he goes to Columbia University.
He becomes valedictorian of the university at 19 years old.

**SPEAKER_3** (0:49)
At 15 he goes to the college.

**Patrick Bet-David** (0:50)
At 15 goes to university. At 19 years old, he graduates valedictorian from an Ivy League school in 2021, immediately starts working for SPF's philanthropy leg that he has. Then from there, he joins OpenAI, works for Sam Altman from 2023 to 2024 on their super alignment project on AI safety and couple other things. Then he leaks information, I believe, to an executive of Anthropic. Because of that, he gets fired. When he gets fired, about a year and a half ago, two years ago, he writes a report that goes viral, a 165 page report that he writes. He calls situational awareness. When he writes this report, guess who reads it? Every major AI investor, all the billionaires are like, what is this all about? Because of that, he gets interest from people. He creates his own hedge fund, Vinnie, called situational awareness, based on the report that he wrote. He gets approached by the founder of GitHub. He gets approached by folks that I believe with brothers that started Stripe, if I'm not mistaken, the billionaire brothers.
And instead of like going out there and getting money from the bigger guys, he gets money from billionaires. And next thing you know, it starts off with $225 million.
And he says, rather than investing where everybody else is investing, we're going to go to a different place. We're going to invest in the people that are building the infrastructure. So he's going to complete, he bets on AI infrastructure. His biggest single largest holding was a company called Nebius, N-B-I-S. At one point, 40% of portfolio was just this company. Can you type in Nebius N-B-I-S so we can kind of look it up on what they do, just kind of go to their profile? The other companies that he invests in is Sandisk, Memory Chipmaker, Micron, CoreWave, SKH, and Korea. But once he shorted, shorted means you're going up against. These guys are not going to make it. Adobe was one of them that he shorts against.
Why would you short against Adobe? Well, first six months of the year, this guy is Warren Buffett on steroids. He is Jim Simons on steroids from Renaissance Technologies. The first six months of the year, his return, if you invested with them, made 439% Vini in six months. Do you know how long it would take you to make 439%?
So think about it this way. Investment Company, Active American Mutual Fund, with American Fund, since the last, however many, since 1934, I believe, has done 12%.
12% would take you 30 years to get 439%, give or take, it's not 30 years, but it would take you 20 years to get that kind of return. He does it in six months. Now everyone's coming. Now you got like, hey, you got money from everybody. We're talking, the bigger guys are now showing up. Hey, do you need more money from us? So his fund goes from 225 million, two billion to two billion, to 45 billion dollars.

**SPEAKER_1** (3:48)
How long?

**Patrick Bet-David** (3:49)
But what the guy, in 18 months, but Vinny. So at this point, he's a billionaire. He's putting up his wedding, big wedding, he's putting up in Carmel. He's going through his wedding, but he does a margin call.

**SPEAKER_1** (4:00)
Which is what?

**Patrick Bet-David** (4:00)
So here's how it works.
When I was 20 years old, I got out of the army. I come out and I buy some stocks. And then it was either E-Trade, I think it was E-Trade, they're like, hey, you know you can do margin on this. How does margin work? You put up 2,000, we'll give you $2,000 of debt. No way, yes. And I'm like, this stock's gonna go.
So you put it in. So it's 2,000, just think about it. $2,000 on credit card, there are $2,000 of your own money. Which means if you make 50%, you really made how much money? 100%.