Leopold Blows Up, OpenAI Drastically Cuts Prices, Microsoft’s Best Day

**Alex Kantrowitz** (0:00)
Leopold Aschenbrenner's Situational Awareness Hedge Fund blows up and sells off its stock portfolio. OpenAI has cut prices on its latest models by as much as 80%, and Big Tech earnings leave Satya Nadella a very happy man. That's coming up with Reed Albergotti from Semafor right after this. In the face of ongoing disruption and opportunity, TMT leaders need to deliver tangible results, not just ideas. When pace and performance matter most, PwC combines market insights and deep sector experience with AI, Cloud, and emerging tech to accelerate your transformation and drive measurable ROI from strategy to execution. PwC can help you anticipate what's next, outpace disruption, and compete. For more information, visit pwc.com.

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**Alex Kantrowitz** (1:43)
Welcome to Big Technology Podcast, a show for cool-headed and nuanced conversation of the tech world and beyond. We have a great show for you today. We're going to talk all about the implosion, but it's still kicking, of Leopold Aschenbrenner's Situational Awareness Hedge Fund.
Too much fund, too little hedge seems like to be the problem there. We'll also talk about OpenAI cutting prices on its latest models. Some of them buy as much as 80%. What does it say about the AI price war? And of course, it's Big Tech Earnings Week, so we'll just go through the big takeaways from what we saw from Big Tech, especially as it relates to the AI trade. So joining us today is Reed Albergotti, returning champion from Semafor.
Reed, great to see you. Welcome back.

**Reed Albergotti** (2:26)
It's awesome to be here. Glad to be introduced as returning champion, but I didn't know this was a contest.

**Alex Kantrowitz** (2:33)
It is.

**Reed Albergotti** (2:33)
It is. What are the KPIs? How do I win? How do I stay on top?

**Alex Kantrowitz** (2:37)
I think just have a good time, do what you do.
There's no worries on this one. So Reed, I don't know if you've been following the blow up of situational awareness, which has been this hedge fund from Leopold Aschenbrenner, who's a former OpenAI employee, a former FTX employee. It was the highest performing hedge fund in the world, I think. It went from millions of dollars in funds to $20 billion in assets under management, and then I think blow up is maybe a little too strong, but it effectively blew up this week and it had to sell. It's a large part of its stock portfolio or all of its stock portfolio to Citadel run by Ken Griffin.
I was thinking, is this too niche to start the show, but it's just one of those stories that I'm just too fascinated by to wait until the second half. So curious what your perspective is on what's happened here. Obviously, he'll still continue with the percentage of his assets that he's kept, including a large stake in Anthropic. But I'm sure there's some big lessons to draw here, and I'm curious which ones you've drawn.

**Reed Albergotti** (3:50)
Yeah. In a way, if you just look at what happened on its face, it is just not a technology story at all. It's a guy who got over levered with his market bets and had to sell his position because he couldn't cover the short-term losses. Actually, the fund was actually doing well if you look at his bets.
But you can't handle these short-term dips if you're over levered. It's like, oh, who cares? Why is this important for technology?
But what I think is so fascinating about it is that you watch the reaction to this. Of course, there's a lot of Schadenfreude. This guy was the golden boy. The Wall Street Journal was profiling him and he's this EA, effective altruist person.
And I think there's some joy in him going down from some people. But what it gets at is there is such a divide in the tech industry right now between, I think, there are the more traditional tech people who some might call themselves accelerationists. They just want to see this new technology being built. And then this kind of like, I don't even call it EA because, first of all, since FTX blew up, I don't even hear EA. People don't describe themselves that way anymore. But there is this sort of remnant of the culture of EA, of these people who are just not like your traditional tech people. And if you just step back and think about it, no one in tech would brag. No one in Silicon Valley, I don't know about you, I've never had anyone brag to me about their public market stock trading. That is not what people value in Silicon Valley. They value building. And so in a way, it's like this, to me, it just highlights this sort of new cultural divide, which I'm fascinated by. I just, I don't know where it's going to go. It could disappear or it could turn into an even bigger rift and there's like two tech industries essentially.