Updates From the #1 AI Investor: Leopold's NVIDIA & Anthropic Strategy

**Josh** (0:00)
Leopold Aschenbrenner, that 24-year-old guy who invests in AI, he's very clearly the best AI investor in the world. There is word on the street that his notional position in this fund is now over $20 billion.
And Ejaaz, we were looking at one of your posts from, what, a month ago, and it was 13, so the fund seems to be doubling basically every quarter, and we have some pretty serious and interesting updates on what Leopold has been investing in. You'll note that in the last episode, we covered his portfolio. He was actually short, a company that a lot of people are familiar with, the largest one in the world, Nvidia, and nobody could figure out why. He had over $9 billion worth of shorts on the largest and hottest AI company in the world. Today, we have some news that might actually uncover the reason why. It comes in the form of a debt offering. Nvidia is actually raising money, which doesn't seem to make sense on the surface. Why would a company as big as Nvidia be raising what just closed as $25 billion in cash when their margins in particular are so, so high? So on the episode today, we're going to talk about Leopold's portfolio, how he's doing so well, what he's looking forward to, and what he's positioning himself to to go next. But also, what's going on with Nvidia?

**Ejaaz** (1:05)
So Leopold Aschenbrenner, for context, ex-OpenAI researcher, raised a fund about one and a half to two years ago. It was a small casual raise of $200 million, I believe. And since then, since his last 13F filings, the fund is worth $13.7 billion.
And so everyone obviously wanted to know what positions he was taking, what his thesis was, what was the next major trade. Now, it's important to understand up until a month ago, Leopold was extremely bullish about everything AI, particularly picks and shovels. So we're talking about the NVIDIAs, the GPU makers, all that kind of stuff. And then a month ago, it was revealed that he wasn't especially bullish on the semiconductor landscape. He was still bullish on things like memory and power, those kinds of bottleneck constraints.
And maybe he was bullish neoclouds as well, but he wasn't bullish the most valuable company in the world, Nvidia. And we have a total of $9 billion worth of puts in Nvidia, AsML and Oracle. So these are companies that are key to the infrastructure boom, which is what has been heralded as the best and most certain trade in AI. So people started getting concerned. They were like, is this the AI bubble popping? Like, we don't see any signs of this. Nvidia is still selling so many GPUs. What could be the problem? And since then, we've uncovered a few things. The major one being that Nvidia just raised $25 billion in a bond offering from external capital. So what this means, effectively, is they're raising money outside of their balance sheet. So it causes the question, which is why on earth is the most valuable company in the world that has the most money, that's making the most money, that has the highest margins, raising $25 million?

**Josh** (2:45)
In fact, they weren't only going to plan to raise, they were only going to plan to raise $20 billion. And they actually wound up raising $25 billion, which was more than three times oversubscribed. And it's funny, in the last episode that we were talking about this portfolio, are we in a bubble?
How do we know when the top is getting closer to being in? We're like, don't worry about it. All these companies are spending a tremendous amount of capex, but they have a huge amount of revenue to fund all of that. It's coming right off the balance sheet. This is the first time since 2021, in the case of Nvidia, where they're actually raising money outside of the balance sheet. They're not taking their money on the balance sheet, which I believe is about $12 billion they currently have. And that leads me to a few questions. It's like, Leopold is short, Nvidia is raising some debt. When it seems like they have infinite cash and infinite margins, what's actually going on here? So Ejaaz, maybe you could help us unpack what this deal actually was. This is a bond offering, which is not just a general fundraise. It's a little bit different. And at the end of the day now, Nvidia now has $25 billion additional dollars on the balance sheet for what I assume is a pretty low rate.

**Ejaaz** (3:43)
So let me give you both sides of the story here.
Nvidia has around $13.7 billion on their cash balance sheet. So this is money that they could just spend to do whatever they want. So the question then is, why are they raising external capital? Well, the analogy is think of you purchasing a house. Typically, most people would, if they have the money, they would still take a mortgage out. Why? Because you can use your capital for other purposes, and you can just borrow money at a really cheap rate. Now, interest rates have been pretty cataclysmic for a while now, but if you're Nvidia, the most valuable company in the world, that has the most valuable stock in the world, the most desirable stock in the world, hey, you could raise pretty decent rates. I've got the breakdown over here. For the $25 billion bond offering, they've got bonds that range between 2-30 years. So it's effectively free money that they're raising at. The interest rates are almost nothing. It's almost as good as government yield bond rates itself, which is the best offering that you could potentially get. They were 4X oversubscribed for people who wanted to help invest in this money. So $85 billion worth of capital wanted to pummel into this $25 billion rate. So Nvidia could just have their pick of the litter. Now, if you want to look at the reasons behind why they're doing this, Nvidia's stated claim officially is, this is just financial bookkeeping. We want to pay off and refinance some debt that we have on our balance sheet, which sounds familiar because Google did something very similar about three weeks ago, and then they did it earlier on this year in February. So you could take the stated claim that this is financial bookkeeping. But the other side of it is, does it seem pretty coincidental that Nvidia, Amazon, Google, and I think three of the other hyperscalers have all raised external debt financing in the last month and a half. And it's a mixture of equity selling, which is what Google's done just last week or three weeks ago. And it's a mixture of bond raises as well. So Leopold could be right in the sense that this might be marking the start of a bubble popping or coming down, the house of cards are coming down, if this is the side of a levered bet or a levered raise. But right now, if you look at the financial structuring of this entire thing, it doesn't entirely say that.