The Sound of Inevitability
The article profiles the rise and sudden fall of Leopold Aschenbrenner’s Situational Awareness LP, a hedge fund that bet heavily on AI hardware and chips. After achieving massive returns, the fund suffered a sharp reversal due to market volatility and was forced to liquidate its public portfolio.
Why it matters
The collapse illustrates the extreme volatility and risks associated with concentrated bets on the AI infrastructure boom.
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Kris Abdelmessih is not only a gifted derivatives trader, with a 20+ year career at Susquehanna and Parallax, but he is also a gifted writer with an amazing ability to explain the business of trading AND the underlying concepts of trading. Today Kris is one of the most widely-read voices in the trading and derivatives space, writing under his Moontower brand.
[On the modern AI thesis] Aschenbrenner was early and smart and articulate about it. This allowed him to raise money, and the fact that it has been basically correct allowed him to return 270% through May.
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