Meteoric rise and fall: meet the young man all of Wall Street is talking about

But this week, the limitations of the 25-year-old’s vision were exposed when the artificial intelligence hedge fund he runs – called Situational Awareness, which is also the name of his viral manifesto from June 2024 – collided with reality.

Earlier this month, his fund managed $45 billion in assets. On Thursday, he was forced to sell his assets at a significant discount to Ken Griffin’s Citadel fund, with the fund’s holdings reportedly dropping to around $10 billion.

The story of Aschenbrenner’s meteoric rise and sudden fall has fascinated both Wall Street and technology circles, making him the most prominent victim yet of the volatility accompanying the artificial intelligence bubble.

His online followers saw Aschenbrenner, who was the valedictorian of his class at Columbia University at just 19, as a genius for the next big trend, and followed his fund’s quarterly reports for clues about hot AI stocks.

According to the Wall Street Journal before this month’s fall, the fund had posted a return of more than 1,000% since its inception.

No money management experience

Critics pointed out that Aschenbrenner had no money management experience before launching his fund in July 2024, calling him “more lucky than intelligent.” Some noted that his early work experience was at the failed crypto firm FTX, where he helped disgraced founder Sam Bankman-Fried run a charity from a penthouse in the Bahamas.

Others on Wall Street, including former traders at international investment banks, noted that given reports that the fund used leverage of up to 400%, the collapse was not surprising.

“A lot of people saw this explosion as a question of ‘when,’ not ‘if,'” said Jerry Dew, who runs a Wall Street coaching firm. “Maybe his views on AI are right in the long term, but in the public markets, you have to be prepared for the short term.”

According to sources who spoke to CNBC before the forced sale to Citadel, about two-thirds of the fund’s holdings were in long and short positions in public stocks. The rest were holdings in private companies, including a billion-dollar investment in Anthropic.

According to the publications, the dramatic collapse also coincides with his wedding planned for this weekend, Aschenbrenner is engaged to Avitel Blewitt, the chief of staff of Anthropic CEO Dario Amoday, according to a profile in Fortune magazine.

Aschenbrenner, who was born in Germany to doctor parents before moving to the US, was interested in mathematics and computer science at a young age. He skipped several grades in the German education system, graduated high school at the age of 15, and as a teenager at Columbia University attracted attention thanks to an academic paper on “Existential Risk and Growth”.

His Columbia classmate, Sofia Monterone, said she had never heard of Aschenbrenner before meeting him on Zoom shortly before their 2021 graduation. “It’s not like he was some prince who came out of the university walls,” Monterone told CNBC. “He was just another guy.” In that interaction, Monterone, who was runner-up for the class, said she found her classmate “childish” and lacking in social skills.

While in Colombia, he co-founded the local chapter of Effective Altruism, a philosophy popular in certain tech circles that encourages entrepreneurs to make as much money as possible to help humanity.

This network became his career pipeline, eventually leading him to work with another proponent of effective altruism, Bankman-Fried, after graduating in 2021. He briefly worked at Future Fund, the philanthropic arm of FTX, before the crypto company’s collapse.

The layoffs from OpenAI

In 2023, Aschenbrenner joined the team at OpenAI, working under Ilya Sutzkever on the problem of adapting AI to human interests. After the hacker broke into OpenAI’s internal systems, he wrote a memo to the board warning that the company’s security was not strong enough to stop foreign espionage, specifically mentioning China.

In 2024, the company fired Aschenbrenner after accusing him of unlawfully sharing confidential information – a charge he denied, claiming he only raised concerns about the company’s security procedures.

Just weeks after leaving OpenAI, Aschenbrenner turned his brief experience at the leading AI company into a comprehensive vision of where AI and the world are headed.

His June 2024 essay argued that governments severely underestimate the rate of progress of artificial intelligence. His admirers saw it as proof that Aschenbrenner was uplifted with valuable insight into the trajectory of intelligence, while critics said the essay exaggerated both the technology’s short-term capabilities and its certainties about the future.

By July of that year, Aschenbrenner leveraged his rising publicity into seed capital for his hedge fund, raising about $225 million from Stripe founders Patrick and John Collison, former GitHub CEO Nat Friedman, and investor Daniel Gross.

This marked the beginning of a two-year run unmatched in the informal history of Wall Street.

“Before long, the world will wake up,” Aschenbrenner wrote at the time, adding that only a few hundred people in the AI community know what’s coming.

“If they see the future even approximately correctly,” he wrote, “we’re in for a wild ride.”