Wall Street's AI Stock God and His Billion-Dollar Crash
Hey Sarah, welcome back to "Learn English with Podcasts"! I have a wild story from Wall Street today. It's about a young guy who made billions and lost everything in just a few weeks.
That sounds dramatic. Who is he?
His name is Leopold Aschenbrenner. He's a 24-year-old from Germany. He studied at Columbia University, graduated first in his class, and then worked at OpenAI.
OpenAI? That's the company behind ChatGPT, right?
Exactly. He was a researcher there. In 2024, he started his own hedge fund called "Situational Awareness." The idea was simple: buy AI stocks and use a lot of borrowed money, called leverage, to make the bets bigger.
How much bigger?
Much bigger. His fund used leverage of up to four times. That means if you have one dollar, you can invest four dollars. When things go well, you make four times the profit. But when things go bad, you lose four times as much.
That sounds very risky.
It was. But at first, it worked incredibly well. The fund made over 2,000 percent returns. By July, it was managing 45 billion dollars. The media called him the "AI Stock God."
Wow. So what went wrong?
In July, global chip stocks dropped sharply. Stocks like SanDisk, CoreWeave, and Bloom Energy all fell hard. And because his fund had so much borrowed money, the losses were enormous.
How much did he lose?
Over 40 billion dollars. That's about 2,800 billion Chinese yuan. The fund had to sell almost everything.
That's heartbreaking. Did anyone buy his stocks?
Yes. Ken Griffin's Citadel, one of the biggest hedge funds in the world, stepped in. They bought most of his remaining stock portfolio in the last 24 hours.
And then what happened the next day?
Here's the crazy part. The very next day after Citadel bought his stocks, they all surged. SanDisk rose over 25 percent. CoreWeave went up more than 21 percent. Bloom Energy jumped over 26 percent.
So the stocks he was forced to sell went up the very next day? That's terrible timing.
It really is. If he had held on just a little longer, he might have recovered most of his losses. But with that much leverage, he couldn't wait.
What's the lesson here?
Leverage is like a double-edged sword. When things are good, it makes you rich very fast. But when the market turns, it can destroy you. Even the smartest people with the best information can get wiped out.
He was supposed to get married this weekend too, right?
Yes. He was engaged to Avital Balwit, who is a chief of staff at Anthropic. So he lost his fund right before his wedding. That makes it even more painful.
You know what this reminds me of? It's like the stock market is a story with two sides. On one side, people celebrate the gains. On the other side, someone is always paying the price.
That's a deep way to look at it. And it shows that even in the world of AI, where everything seems exciting and new, the old rules of finance still apply. Don't bet more than you can afford to lose.
Thanks for sharing this story, Mike. It's a good reminder that big risks can come with big consequences.
Thanks for listening, everyone. See you next time on "Learn English with Podcasts."