The 25-year-old OpenAI prodigy is dragging global stock investors down to ruin along with him.

Today, the story of this 25-year-old "AI prophet" has gone viral across the entire internet.

Just now, a textbook-level forced liquidation unfolded on Wall Street.

The protagonist of this brutal turmoil is Leopold Aschenbrenner, hailed as the "AI prophet" in Silicon Valley, and his hedge fund Situational Awareness, which posted an astonishing 439% return rate.

For accurately betting on the AI wave, he was once elevated to the status of a legend, in charge of a sprawling empire worth over 20 billion US dollars.

However, a sudden crash in AI tech stocks wiped out this legendary fund that had skyrocketed from 200 million to 45 billion US dollars in just one month.

Why did the 45-billion-dollar empire collapse overnight?

The reason is that the AI hardware stocks he held heavy long positions in (including SK Hynix, Micron, CoreWeave, etc.) plummeted by more than 35% this month; meanwhile, the software stocks he shorted (such as Adobe) rebounded against the trend.

Ironically, the very day after he was forced to liquidate all positions, those AI stocks he held heavy positions in ushered in a retaliatory surge —

He died on the eve of the big AI stock rally.

Worse still, the biggest victims in this incident turned out to be South Korean retail investors half a world away — they went all-in on their faith in AI, only to fall straight into the abyss.

It is rather sighing that this "prophet" correctly predicted the trend, but died just five minutes before dawn, dragging retail investors across half the world down with him.

AI "Prodigy",

Formed the Most Powerful Couple in Silicon Valley With His Fiancée

The male lead of this "epic-level blowup", Leopold Aschenbrenner, lived a legendary life in his first 25 years.

He is a German-born post-2000s generation, admitted to Columbia University at 15, and graduated at the top of his class at 19.

His career path after graduation is exactly the template of a hit success story: he first joined SBF's FTX charity fund, then seamlessly moved to OpenAI, entering the "Super Alignment Team" led by Ilya personally, as the absolute core member of OpenAI.

But what really fascinated Silicon Valley gossip circles is the "AI power couple" he formed with his fiancée Avital Balwit.

This lady is also an outstanding talent: she is a Rhodes Scholar, an alumna of Oxford's Future of Humanity Institute, and now serves as Chief of Staff to the CEO of Anthropic.

This couple is as formidable as Mr. and Mrs. Smith: one used to work at OpenAI, the other is a senior executive at Anthropic. Casual conversations over dinner are exchanges of the top secrets in the AI industry.

Later, Leopold was fired by OpenAI for "whistleblowing". In a fit of rage, he wrote a 165-page "AI Bible" that directly caused a sensation across Silicon Valley.

In June 2024, Leopold Aschenbrenner published a long article, extrapolating from the trend of "computing power and data multiplying tenfold round after round", all the way to the "intelligence explosion" triggered by AGI and intelligent agents in 2027, as well as the trillion-dollar cluster competition.

This long article titled *Situational Awareness: The Next Ten Years* predicted that AGI would subvert the world in 2027. The article spread wildly in Silicon Valley, and he then ventured into Wall Street with his "AI Bible".

Earned 439% in Half a Year,

The 20-Billion-Dollar Empire Was One Step Away From Being Deified

Next, this young man with no professional investment experience founded the hedge fund Situational Awareness LP.

The name itself is rather ostentatious.

Its early investor lineup is even comparable to the Silicon Valley All-Star team: the Collison brothers, co-founders of Stripe, Daniel Gross, head of Meta AI, quantitative giant Jane Street... all put their money in.

The fund started with only about 225 million US dollars at the end of 2024, and grew to more than 20 billion US dollars by mid-2026, peaking at nearly 45 billion US dollars.

Their performance was so dazzling: 8 people managed 45 billion US dollars, making a staggering 439% return in half a year! This number is so attractive that even Warren Buffett would want to switch careers.

Early positions of Situational Awareness LP: chips, power and data centers, all of which are "shovel sellers" for AI infrastructure (Source: Fortune)

The fund's strategy is very straightforward and aggressive: max out leverage across the entire AI supply chain, and go all in with heavy positions.

He not only held heavy positions in SK Hynix, SanDisk, and Nebius Group, but also took large stakes in Anthropic, where his fiancée works, in the private market.

In the first half of 2026, the AI sector kept surging, and Leopold's strategy achieved overwhelming success.

At the end of July, Leopold wrote a letter to investors, with a tone roughly like: "Those of you who didn't add positions before, you regret it now, right? It's okay, you can still wire in money now."

— This letter was later referred to by the market as a "death flag".

The Reaper Arrives: South Korean Retail Investors' Stampede

In July, AI stocks suddenly took a sharp turn for the worse. The market began to worry: these tech companies are burning cash too fast, where is the return? A wave of sell-offs kicked off.

The first avalanche even started in South Korea.

South Korean retail investors are famously "maniacs who borrow money to trade stocks". As AI concept stocks fell, brokers immediately issued margin call notices: top up your funds immediately, or we will force liquidation; if you can't top up, we will force sell your positions.

South Korean investors were forced to sell frantically, driving stock prices even lower, which in turn triggered more margin calls... This death spiral dragged all assets labeled "AI" across the globe into the turmoil.

And Leopold's fund was right at the very center of this spiral.

If he had only bought and held the positions, the losses would only be on paper.

But Leopold made the most fatal mistake on Wall Street — excessive use of leverage.

In the bull market, he used funds borrowed from Goldman Sachs and JPMorgan Chase to amplify his positions, creating the 439% myth; but when the market turned bearish, the leverage backfired on him completely.

Several AI stocks heavily held by Situational Awareness LP peaked in June and collectively halved in July, with declines generally exceeding 40%, which was the direct trigger for its forced liquidation (Source: Bloomberg)

Wall Street bankers turned ruthless overnight, issuing sky-high margin calls to him.

In less than 24 hours, Leopold frantically asked investors for help, trying to sell off assets and raise new funds. But everyone hits a man when he's down, his reputation and top-tier connections in Silicon Valley meant nothing at this moment.

Eventually, traders were forced to sell assets according to a brutal schedule, and all positions were forcibly liquidated.

Not only did he blow up his own fund, but he also dragged down global AI concept stocks, with countless retail investors losing their money along with him.

"Face Torn Apart": Citadel the Giant Ate 16 Billion US Dollars in One Bite

For top-tier hedge funds, other people's blowups are exactly their carnival time.

Ken Griffin, founder of Citadel, is known as the top "scavenger" on Wall Street. He is best at buying assets at fire-sale prices when others blow up their funds.

With the arrangement of investment banks, Citadel took over approximately 16 billion US dollars of leveraged positions from Situational Awareness in one go.

Leopold only barely kept the part of the funds bought with clients' own capital, plus about 5 billion US dollars of private equity in Anthropic — that is his fiancée's turf, and also his last hole card.

The whole process of these asset handovers is devastating enough.

Bloomberg's original words are as follows: "Traders call this 'having your face torn apart'. This time it was Ken Griffin who did it. I would never want to take that handover call. It's extremely painful."

The 25-year-old genius who was once elevated to the altar had to lower his head and personally sell the "golden assets" he deeply believed in at a discount to the old foxes on Wall Street.

Adding Insult to Injury: Right After You Blow Up, the Bull Market Returns

If the blowup only brought physical destruction, what happened next was nothing less than mental torture.

Right after the news that Citadel took over the positions was officially announced — those AI stocks that Leopold held heavy positions in suddenly surged in retaliation! The Nasdaq 100 index rose by more than 3% in a single day.

Why?

Because the Wall Street wolves had long been eyeing Leopold's predicament. Everyone was shorting, waiting for him to blow up.

When the news of Citadel's acquisition came out, it meant that the largest "forced selling source" in the market had finally disappeared.

Then short sellers covered their positions, and long buyers launched a counterattack — the bull market was back.

You got the trend of an era right, you have top-tier industry connections, but you used leverage, and the market will push you to the edge of ruin.

The market will not judge whether your idea is correct or not, it only judges whether you can "survive".

The Century-old Law of Wall Street: Got the Trend Right, But Lost to Time

The tragedy of Leopold Aschenbrenner is not an isolated case.

The first example is Long-Term Capital Management (LTCM) in 1998. It had two Nobel laureates on its team, and its mathematical models were impeccable.

As a result, the Russian debt default that year triggered irrational market panic, and their high leverage directly led to a total blowup.