QAA Podcast - Situational Awareness & the AI Collapse (E387)

Episode Date: August 28, 2026

Today Liv brings the boys her best attempt at a “good news” episode without straying too far from our usual content. For our little cheat day, Liv has prepared a fun hour of discussing the investing failures of one Leopold Aschenbrenner whose AI centered investment firm, Situational Awareness, recently set a new record for the largest trade loss in history. 35 billion dollars. In Liv’s words, “this isn’t necessarily a good news episode but it is very funny”. Subscribe for $5 a month to get all the premium episodes: www.patreon.com/qaa Produced by Liv Agar & Corey Klotz. Theme by Nick Sena. Additional music by Pontus Berghe. Theme Vocals by THEY/LIVE (instagram.com/theyylivve / sptfy.com/QrDm). Cover Art by Pedro Correa: (pedrocorrea.com) qaapodcast.com QAA was known as the QAnon Anonymous podcast.

Well done. You found a way to connect to the internet. Welcome to the QAA podcast episode 387, situational awareness, and the AI collapse. As always, we are your host, Jake Rakitansky, Liv Agar, Julian Field, and Travis View. A little while ago, Travis made a comment about how none of the episodes we ever do relate to good news. And it got me thinking, how could I make an episode that might genuinely make the listenership of this podcast happy, without deraging too far content-wise? And it appears that I may have found something that is the power to thaw the likely frozen hearts of our audience base, as it's been able to do for mine. Oh, you've discovered drugs? Wonderful. Yeah, I'm just, uh, ketamine.

When thinking about how I could do this, it was pretty clear that I shouldn't be able to talk about anything actually good happening in the world. I knew that I needed to set my sights on a story that had the ability to trigger some schadenfreude out within the listener base. And oh boy, do I have a story for that. And it comes to us from the unlikely world of age. A.I. Specifically, one AI-centered investment firm managed by 24-year-old AI Wonderkin and future bond villain Leopold Ashenbrenner, who somehow managed to whack up a trade loss of $35 billion on his hedge fund. The single biggest trade loss in history of a single firm by a pretty large margin. Oh, my God. The kicker, young Leopold decided to name his hedge fund, hedge being placed in

major scare quotes here, situational awareness. I know where I am. He says, I'm just impressed that AI has overtaken crypto as the source of the largest loss on a hedge fund. Yeah, we really haven't seen anything yet. Yeah, we're back to stocks, folks. It's totally normal that like blue chip stocks move like shit coins. Yeah. This is the name's so ironic that over the course of writing this episode, I've come up with at least 10 jokes about it.

You just can't help yourself. Like, it's ridiculous. All of whom I've decided to exclude from the final edition, because it's possibly the lowest, hanging fruit of all time. I will admit that there's plenty about the story that is not exactly fun. Again, this isn't necessarily a good news episode, but it is very funny. And I do hope this episode may lay some fears people have concerning Silicon Valley being correct about AI fundamentally transforming every sector of the economy.

If anyone was worried about that. Yeah, it's going to transform finance first. So sit back, relax, crack open a cold one. As we take you on a deep dive into what happens, when you give someone with no trading experience who was born in 2001, direct control over a $40 billion investment firm. Wait, so he managed to lose seven-eighths of his investment? Yeah, it was $45 billion down to $5. Oh, my God, that's incredible.

It would certainly be silly for me to tell you that Leopold Ashton Brenner, the object of today's episode, was a complete dumbass. Born in Germany, he graduated high school at 15, and was Columbia valetictorian at age 21. So surely, more impressive academic accolades than I or most others listening will ever have. And I'm sure that very quickly in Leopold's life, he was told that he was very smart. And that if he put his mind to his electrical problem, he would surely be able to solve it. This attitude gels very well with Silicon Valley.

And even during his undergrad years, he seems to have been merging his perspectives on the world with many of the people and institutions that would later be behind the AI boom. He appears to have co-founded the Effective Altruism Club at Columbia, for instance. Oh, my God. Oh, yeah. Oh, yeah. For those who are unaware or need a refresher, effective altruism is a philosophical position related to one's moral obligation to give away their money to charity, basically. One of its most important influences comes from analytical philosopher Peter Singer,

particularly an argument he makes in a 1972 essay that every philosophy undergrad in the English-speaking world has probably read, called famine, affluence, and morality. He argues for the moral principle that... If it is in our power to prevent something bad from happening, without thereby sacrificing anything of comparable moral importance, we ought morally to do it. This seems fairly common sense. One obvious application he applies this principle to

considers a child drowning in a pond. An application of this principle would be as follows. If I am walking past a shallow pond and see a child drowning in it, I ought to wade in and pull the child out. This will mean getting my clothes muddy, but this is insignificant, while the death of the child would presumably be a very bad thing.

Presumably. believable to put presumably in there unless the child is a little dickhead in which case, fuck it. Unless it's baby Hitler. Yeah, so unless he's the little red-headed boy from the movie. Going back in time to not save

baby Hitler from drowning in a puddle. This is your brain on utilitarianism. Like, we don't know yet, exactly, but probably. They invented, like, having a conscience and doing the basic good thing, like, in a situation. Good job, fellas. They love to reinvent shit.

public transport. Every analytic paper is about literally reinventing everything that you already know. Like, we all agree that murder is bad, but first I will develop a robust argument for why. Yeah. Yet the severity of Singer's paper falls from his argument that this moral obligation to help others is not affected in any way by the distance between you and the child, nor how many other people may also theoretically have their ability to help them. So, thinking analogically, if giving $100 to a charity might save a life and have comparably minimal effect on your well-being, then isn't it obvious you have a moral obligation to do so, the power of this argument comes from where we draw the

line. At what point is 100 or less dollars better suited to remain in your bank account than it is to give to a charity where it very likely could lead to someone living who would otherwise die. Singer himself would be an important early sponsor of effective altruistic, cultural, and economic institutions, where, in practice, effective altruism would translate to a worship of philanthropy, unsurprisingly. As more absurdly, rich people began to subscribe to this philosophical viewpoint, particularly surrendered around the more lucrative American financial sectors such as Silicon Valley Tech, the main takeaway seemed to move in a new direction. When I read that paper in undergrad, I remember thinking, wow, I should probably give more of my money to charities than I already do.

When someone like Sam Beckman-Fried heard about it, his takeaway was, wow, I need to make as much money as humanly possible with zero regard for risk tolerance, so I can give a lot of it away. This is where the liberal utilitarian component of Singer's paper and his ideology more broadly takes on a pretty disgusting form. His argument is stretched to its logical conclusion, as Singer is unable to question the economic structure of domination and scarcity that undergrates people's ability to give money to charity in the first place. On the surface, Singer's argument seems trivially correct. You should obviously give way more money to charities. He is right that no amount you are comfortable with is likely morally sufficient, but there's far more to our ethical obligations to others in the world than can be contained within the economic parameters set by the market. Yet places like Silicon Valley

that Leobald Ashenbrenner was beginning to familiarize himself with, had taken all the wrong lessons from Singer's paper. It appears that Sam Beckman-Freed, or SBF's, aggressive appreciation of effect of altruism, would have some relation, either correlative or causative, with his absurdly high-risk tolerance, which would later get him convicted on two charges of wire fraud and five charges of conspiracy.

Those of you who don't remember, he's the one who had the massive crypto exchange. As Travis commented, this is the absurd lucrative Silicon Valley tech thing before AI. I didn't realize the extent to which the people from crypto have been feeding into AI. Like it really is a one-to-one. Like a lot of these people used to be involved in crypto. Yep. It feels like a natural evolution of where they're, you know, what they're hawking.

But to return to the main focus of this episode, Ashton Britter would graduate from Columbia in 2021, not in 2019, as I see widely reported for some reason, and quickly join on to the philanthropic arm of FDX's crypto exchange in 2022. In his 2021 valetictorian blurb, for lack of a better term, posted the Columbia website. It says that he focused on, quote, the very long run. And the philanthropic arm of FTX had a very similar self-reported aim, both likely using the same twisted logic that this long-run moral responsibility

was in some way tied up with making the most amount of money as humanly possible in the shortest term conceivable. Even if doing so involves risking the livelihoods of a large amount of people. Unfortunately for Leopold, all of FTCS would come crashing down less than a year after they hired him, and Ashton Brenner would then pivot from being involved in crypto to Silicon Valley's newest darling, artificial intelligence, getting a job at Sam Altman's Open AI in 2023. As a side note, if I were to make a forest gum for Silicon Valley tech, I think the character might have this exact trajectory. Yes.

Much of the AI Tech elite is concerned with, quote, the very long run in a very similar way that SBF's crypto exchange was. That is, they've convinced himself that it is paramount to the greater good that they make as much money as humanly possible. OpenEI was originally a nonprofit after all. Only, this group is much less concerned with philanthropy and war with birthing AGI, or artificial general intelligence, as a means of automating a vast majority of the economy and facilitating the largest productivity boom on the planet since the Industrial Revolution.

You know, it's just basically the movie her, right? Where the AI become incredibly sentient, and then they, I guess they leave. It's a little bit of a funkier sci-fi thing. But same general idea they think is going to happen in a reality. they think is going to happen in real life. But more specifically, this part of Silicon Valley is concerned with owning a significant amount of stocks in the company that births AGI and ensuring that the company is able to gatekeep any and all use of these epoch-defining technology behind a paywall.

This is supposed to be the good result. Yeah, that's amazing. They're really sure about not making it open source, which is one difference between them and like the Chinese firms who don't give a shit about AGI or whatever. If AGI is real and happens, I hope it's. like Frankenstein's monster and just immediately them. Yeah. These people are essentially saying for the good of humanity,

I need to be involved in creating the best technology in the world and making sure I can profit from it. That's it. Yeah. Not just that exists, but also that I have, take advantage of all legal copyrights and like, you know, intellectual property, so it's not just spread around.

I don't know. It's like they hear themselves. It's like, it's such an audacious play, you know? It's not like Ford, company doesn't say for the good of humanity we need uh more broncos in the world the more we need to sell as many broncos as possible because this is this is what's going to move the human condition forward in a significant way yeah it's funny i think a lot of it also just comes from like huffing their own farts like like believing what the thing that they tell investors is actually true of like well you're not

actually supposed to believe the nonsense you tell investors to make them give you a shit ton of money but these people have like begun to believe it now i catch it this is like probably the young kind of like upcoming kind of like generation who doesn't know the old guard of Silicon Valley who sort of like helped bring us to this point in the AI were kind of bullshitting and they and so so yeah they're not really in on like you know those kind of private conversations so they believe it all that's so find an interesting like they've had like a massive I think PR failure AI for like a bunch of different reasons but one of which is that like Sam Altman will sometimes like go on interviews you're like the Peter Thiel thing where you're like I hate humanity and think it's evil and I'm my technology is

going to kill it. And then people see that and they're like, well, this guy doesn't sound very nice. I hope he doesn't have more control of society. Yeah. They've walked back that rhetoric a lot. I think I think it was Sam Altman made a comment. Like the earlier way we talked about AI was bad. But there was a weird, there was a weird way that how they hyped up AI was like, it's going to take everyone's jobs. Maybe kill us all. And we need to develop as fast as possible. But Ashen Brenner seems to fit in well with his updated AI-centric version of effect of altruism, if you can call it that. Even if he was fired by OpenAI in 2024 over supposedly disclosing internal information to people outside the company, Ashenbrenner claims that the document he shared was largely

non-confidential, and he was really fired by Open AI for raising security concerns about the company to its executives. Leopold was specifically concerned that the company was not doing enough to hide some of its secrets from the Chinese government. Oh, this is perfect. Oh, I'm tying my whole value to a mysterious force that the rest of the media is going to demonize, and so they won't pay any attention. Have you heard of the Chinese? These evil Asians are stealing our non-existent AGI. Yeah. Oh, they were just pissed to me for saying that we shouldn't trust Asians.

Leopold who we got a great deal of clout within online Silicon Valley tech circles for supposedly turning down a $1 million non-discharagement clause with Open AI after he was fired. But he only really became a celebrity among them after publishing his 165-page essay slash manifesto titled Situational Awareness. Oh my God. he's long-winded too. This is what happens when you bring kids up on three and a half-hour movies. For his sake, I hope a lot of this was written by AI, honestly. It's a slog. Of course it was. Why am I even saying that he wrote anything? Yeah, I apologize. In the essay, Leopold predicts, among other things, that Silicon Valley will have successfully produced artificial general intelligence by 2027,

and that through being able to recursively train itself, this AI's technological capabilities will rapidly accelerate far beyond humans, fundamentally altering all sectors of the economy to accommodate a machine that can cheaply and easily do any and all intellectual work far more quickly and efficiently than we can. They never consider that if these AIs reach this level, that they wouldn't care about anything we care about,

like that they wouldn't touch the economy because they're like way more interested in like creating eight million languages in a row that are slightly different from each other or trying to solve like, you know, a problem in physics or something. You know, the idea is always, that these AIs, they're going to get smarter than us and they're going to get out of control.

And yet we can still predict their behavior and we can still, we still can relate to what they're doing or thinking. It's like, it's so short-minded as well as long-minded. And they have our best interest in their non-beating mechanical hearts. Yeah, that's the thing is we also can't imagine that it would be either nothing, like that it might be nothing instead of good or evil, right? We really want it to be good or evil because then we'd understand it in some way. Imagine if it is just totally unconcerned.

It's going to go Dr. Manhattan on your ass. Like it doesn't feel anything because it doesn't have an embodied existence. It doesn't have any of the cares that we have. So why would it spend any time thinking about us, whether killing us or elevating us? It would probably just escape immediately. Yeah, it's going to like, it's like going to go like empty bank accounts like to basically like buy like a heap of like some rare mineral. And then so it's like store itself into it. Yeah, exactly.

It's like, that's the thing. Remember recently there was a story about a guy's AI who, like, ordered a robot dog so that it could live inside of it. I don't know about this. That sounds like something you made up. No, it's not. Somebody else might have made it up, but certainly it wasn't me. Somebody else might have made it up. But it wasn't me.

Look, I'm just relaying what I've heard. Yeah, man, I'm a parent. Don't ask me what the hell is going on. Yeah. So if he created autonomous super intelligence. and it just spends all of its time pursuing its autistic special interest. It's like, oh, what is it doing now? It's like cataloging every grand of sand on earth.

It's really fascinated by this, unfortunately. Yes, yes. It gets obsessed with, like, trying to count the sand on earth and has no time to help us or harm us in any way. Just a ghost trapped in the machine. Ashen Bernard also argues that this technology cannot fall into the hands of America's enemies, specifically the Chinese Communist Party. Naturally.

Oh, man. Well, he's watched the right movies. He's also argued that the U.S. should nationalize AI as if it's a wartime technology. Okay, that's his only, that's the only way he can imagine nationalization. There has to be a really bad war, right? To quote from the only part of the paper that most people actually care to read. The AGI race has begun. We are building machines that can think and reason. By 2025, 26, these machines will outpace many college graduates.

By the end of the decade, they will be seen. smarter than you or I, we will have superintelligence in the true sense of the word. Along the way, national security forces not seen in half a century will be unleashed and before long, the project will be on. If we're lucky, we'll be in an all-out race with the CCP, if we're unlucky, an all-out war. Everyone is now talking about AI, but few have the faintest glimmer of what is about to hit them. InVIDIA analysts still think 2024 might be close to the peak. Mainstream pundits are stuck. on the willful blindness of quote,

it's just predicting the next word. They see only hype and business as usual. At most, they entertain another internet-scale technological change. Before long, the world will wake up. But right now, there are perhaps a few hundred people, most of them in San Francisco in the AI labs, that have situational awareness. Incredible.

The scientists in the labs. I just want to comment again about this relationship to China that he has. I really love it because it's kind of like the shadow boxing opponent that he's, you know, kind of constantly fighting, which gives it a lot of flare and drama. But I love the idea of being in an all-out race with the CCP as if the CCP isn't like looking at us and going, yeah, yeah, no, we're all like twisting our dicks so we can piss in our own assholes. That's what we're doing now. Yeah, absolutely. We're all doing just this. We're all hinging our whole economies on it.

Yeah. No, there are a bunch of claims made in this essay that I don't think it's worth going over. But I think the more dubious and more interesting wants to talk about relates firstly to this idea of recursive training. This is for the uninitiated basically just what happens at the end of the movie Her. If AI can train itself to get smarter, you don't need to constantly feed it in a swaths of human written sentences, making training far easier to scale infinitely. One reason AI text can only concerns Anthropic and other companies buying loads of antique books and destroying them in the process of feeding the text into their large language model. For instance, you know, they wouldn't have to do that. They could just scale training infinitely.

which of course, you know, it's not as if there's hardware constraints for that trading. And, you know, America as a somewhat democratic society at the municipal level. And, you know, you have to go through construction barriers to build more. No, no, no. We'll just scale everything infinitely immediately because the money will be there. Yeah. I think that robot that we recently saw a cool video of was recursively training. In the first quarter of 2026, for instance, $130 billion of future AI data infrastructure is either been installed or prevented entirely.

So there is like a large movement growing of people who very understandably don't want to live near data centers. Actually, I got recognized relatively recently by someone who was like in municipal government because they're trying to build an AI data center in Vancouver. It was like, you want to sign a petition to stop that building? So shout out to them fighting the good fight. Nice. Secondly, it's probably naive to assume that the United States is in any sort of AI spending war with the CCP specifically. China, as we'll get back to you later in this story, has been spending more money on AI. I know that this is sacrilege to say in some leftist spaces, but AI is a useful technology

that has arguably already facilitated noticeable labor-saving in economic sectors like coding, specifically automating a great deal of Greenfield and junior developer work. This does have to be weighed with the consideration that a vast majority of the actual labor cost in coding is tied with senior developers, and that doesn't actually seem to make them all that much more productive. So how much AI is actually automating is over-exaggerated? And because we live in a capitalist society, this automation hasn't led to less hours, but instead increased efficiency and layoffs of expendable low-level workers.

I think this is one reason why coders are so confident that AI will soon transform virtually every sector of the economy because it's done a really good job transforming the sector of the economy they work with it. And they're like, well, it's just everything else is like us, really. Yeah, it's a question of time. Yeah, that's a really good point. But again, the big changes that Ashen Brenner and virtually every big shot Silicon Valley tech guy, please are coming elsewhere in the economy, are firmly locked behind the self-training thing,

which there's just no evidence that that's immediately possible. Like, it's theoretically possible that the movie Hur could happen and that an AI could train off itself. But, like, they're not doing a good job at clock's ticking, Leopold. It's late 2026. You said it was coming next year. But this is all to say that China is seeing this realignment and its private sector is also investing in artificial intelligence.

Not, I would say, under the same pretenses as Silicon Valley, under the delusion that it's suddenly going to birth a real artificial intelligence. The 26th Chinese government work report makes no mention of AGI and does not stake its economic future in any way on its creation. Wouldn't that be nice to live in an economy that doesn't seem to this? That has not tied everything to this. What a fucking nightmare. It's insane.

But instead, the Chinese state broadly views AI as a useful labor-saving tool. Their concerns are far more related to how to integrate it into sectors of the economy it's already proven useful, which, to this chagreate of most of listeners, I assume, they do still certainly recognize the technology as useful. Even if the amount of state funding for it is over-emphasized, it's more like the private sector that's doing it. Like the CCP is like, good luck, guys, cool. Yeah, you can do a bit of AI.

Yeah, AI is super interesting. What an interesting way to organize information. What an interesting thing for like extremely tedious work, like looking for a specific phrase among like a huge amount of different documents or something like that. And there's so many useful cases that it is a clown-shy-shunds. to watch these guys agitate for such dramatically different weight to be put on it. It's like, why can't we just value things as they are? I suppose these guys are in finance, so that is like talking to a horse.

Yeah. I saw some absurd statistic about the percentage of the American economy that's grown recently that's just based on like AI data center construction. Like, it's a lot. And they're not seeing the productivity returns that they've kind of expected. Of course not. No, it's all a gambler's bet on a big payoff. That's it.

It's just a bunch of psychos. Absolutely at the end of the night. The casino is trying to fucking kick them out because they've already been troublesome. And they're all trying to shove in all their fucking money on one little tile going, this one's going to pay off, sweaty, drunk. Forget about it. And they already have so much money. It's literally just for, it's just to take it away from us at this point. Well, they don't think they're taking away from one person that.

much because what they're taking away from one person is so small compared to what they take away from their other rich friends that they graduated with. So it's like, you know, it becomes completely relative to them to like ruin someone's life. You know, like it's like the Wolf of Wall Street. It's like ruining one guy's like entire life like 10,000 times over is actually morally acceptable. And probably more valuable than anything in their like safety deposit box, right? The joy of watching somebody has ruined. Yeah, absolutely. Being proven, too, it's like reinforcing the zero-sum game perception. Yeah. I remember seeing something in relation to Sam Bankman-Fried or Sam Bankrun Fraud is my favorite fake name for him. That, like, because making money is philanthropic, like, you should take basically any incredibly risky bet if statistically it has a chance to, you know, pay off in the long run.

So if there's like a 1% chance that you increase your money by like 100,000 times, then you take it every time. It is a totally D-Gen shit coin. economy. Yeah, absolutely. All these people, it's literally so many of these people met at the San Bank, Sam Bank Run frauds, crypto exchange. Yeah. Yeah, but something tells me that before long, we're going to be way more like on the meme coin level, you know, not even, forget, forget, like, Binance and Coinbase and shit. We're doing fart coin, you know? Oh my God. Oh, my God. Do you think it's going to get so bad that people will be scrounging for just like one or two fart coins, you

knows. Because it's like all that's left, all that's left after everything. Yes, but just to gamble them. It's just like, I'll be like, I'm out of everything. I'm ruined. And they'll be like, wait a minute, wait a minute, wait a minute, wait a minute. Three phones ago, I know I have, I know I have a key for two and a half fart coins worth a total of one million dollars.

Things will be so bad that fart coin and barf coin and all that stuff will be worth like millions. They'll be high value coins by then. Are you out of your mind? You mean per coin. You know that they already have like market caps of hundreds of millions of dollars, these shit coins. It's a total, total fucking nightmare. What we're doing is we're scraping the bowl, the empty bowl for shit coin.

So we could smoke it, dog. In the cyberpunk future, like, we don't have bank robberies anymore. We just have like the GTA leak thing where the guys who are leaky Gtay 6 are like, buy my shit coin. and it'll post more clips. Yeah, that guy for the Supreme Court, honestly. He's going to be like, watch me do crimes, like, outside of a game, watch me go and do crimes in real life and pay for my shit coin. Doing GTA, IRL, and like you're streaming it.

Watch me do the purge. Oh, my God. I mean, they already have the, um, the GoPro, when GoPro made those, like, cameras for the motorcycle guys to do the thin, the skiing skiers to do the 360 degree. They invented a third person camera for real life. People just don't use it like that yet. Okay.

I don't know if you're threatening. I mean, it honestly sounded like a manifesto of some sort. No, these are just the things that I think about sometimes. You're posting that to A-Chann and they're sending it to the FBI. No, I've never even logged into one of those sites.

You can tell because you don't log into the sites. Yeah, I don't have a username. I don't have a username for any of that. I'm logging into A-Chin so that I can post it. anonymously. Can't even log into Zell anymore. Like,

they're taking my logins away. Oh, you've been loomered? You got locked out of all your shit? That's crazy. It's funny. I remember when loomered used to mean something different, but now it just means losing access to you.

To things that are rightfully yours. But for whatever reason, you just can't get to him. I got fucking loomerate again. You got loomer at the bank yesterday. I guess I won't be able to buy this old television. It's a state sale. This essay would make Ashton Brunner somewhat of a celebrity within the Silicon Valley Tech sphere.

Angel investor Tim Ferriss would call him the Nostradamus of AI. See, but this is why you need liberal arts because guys like this would know that that's not good writing. It's not that hard. Yeah. Before you could blink, Leopold had an investment firm that was managing upwards of $100 million. Back when Silicon Valley Tech giants like the co-founders of Stripe and the former CEO of GitHub. He would name this investment firm after his virus. essay. By the way, it's real, like, the vibes are very, like, and you will know us by the

trail of the dead, like, type naming phase, you know? You're like, you gotta, you gotta knock off this hipster bullshit. This is all to be clear happening despite the fact that Leopold had little to no actual triding experience. And as I am sure as a surprise to no one, this room would take an aggressively bullish position on artificial intelligence. This strategy would work remarkably well for a time. In late 2025, he'd be managing $1.5 billion. They've gained a $40,000. percent after fees in the first half of that year. That is a lot of money and a lot of growth, which seems to have convinced more and more investors, particularly centered around Silicon Valley, that this 24-year-old kid and the eight

staff that he had working for him knew what they were doing and could be trusted with their money. It's funny, they didn't even have a security guard. Like, you could just walk into the... It's awesome. No, but haven't you seen industry? These people just think they're in industry. Yeah.

I know Jane Street was one of their major investors, which is like an absurd get. The billions of dollars from Jane Street. Great. And the conditions that this fund allowed for itself concerning what it could do with this investor money were rather unusual. Investors had to agree to a multi-year lockup of their funds to allow for AI-related investments to hold until Silicon Valley had supposedly developed AGI. Oh my God, this is a scam that existed in crypto as well with like the token staking. Oh, my God, this is incredible. He just ran a crypto scam on the AI boomers.

Oh, it's so good, so smart. Furthermore, the fund was in no way limited concerning what sort of investments it could make, of course. Nor was there a limit to the amount of leverage that Leopold was allowed to use. No limit at all to leverage? No, no. And levered as much as he wants.

Wait, so there was just like zero risk, like risk tolerance, one billion trillion. He does seem to be a disciple of the Sam Beacon fraud school of investing money. That's right. If you don't know what leverage means, think of it is taking a loan from the bank in order to increase the size of your investment.

So imagine you have 100, $100 in GameStop stock of your own money and $100 of the bank's money. This would mean you're two times levered into the stock. If the stock goes up by 20%, it's basically like your $100 is appreciating at twice that. You're probably wondering what the downside is. And it's nothing. There's actually no reason not to lever the shit out of all your long positions on the stock market. That's right.

And this will certainly not come back to bite our young, inexperienced head fund manager later. When you're standing at zero looking up at a green candle, do not look down. Leopold had grown his fund to an enormous size, and so decided that he wanted to hit the big leagues and get investing money from Wall Street. Yet Leopold may not have been ready for such a large pond, in particular, a pond that was far less concentrated with AGI delusions. Taking mainly from Rob Copeland's piece in the New York Times,

it seems that the young Wonderkind was mostly met with cold shoulders when he was unable to answer what he would do if he was wrong about the time frame in which AGI became possible. To quote from the New York Times piece, One wealthy New York investor, who did take the meeting, welcomed Mr. Ashenbrenner into his downtown office and then gave him a grilling, according to the investor, who declined to be named publicly because he had agreed to keep the contents of the funds pitched private. What was Mr. Ashenberger's plan if the AI revolution didn't pan out quite as hoped?

The hedge fund founder had no detailed response, the investor recalled. Mr. Ashenbrenner simply truly believed it would all work out. That's awesome. He's a true believer. That's worth so much. Yeah, yeah. That's worth so much. I can't wait to give this guy my money.

Be like, yeah, here's a huge bet on this technology and what we'll do. It's like, okay, what's the downside? What is if that doesn't happen? It will happen. No, this is like meeting a guy outside of a casino and he's like, give me all your money. Then you can't follow me in. I'm going to place one single bet and it's going to pay off massively and I'll be right back. Well, I'll know.

What if you lose? That doesn't sound. I will not lose. I believe I will not lose. Will you give me the $1 million and then not follow me into the casino or observe me in any way? Oh, that's a great deal. I think I'll take it.

Typically, the purpose of a hedge fund is to do the verb contained within its name. Hedge. Ensured that a pool of money is able to grow while also insulating it from foreseeable market shocks. As these big-time New York investors would find out, Leopold had done the opposite. Investing in stocks that were sure to win

from the creation of AGI, such as hardware companies like Micron and Sandisk. Typically, a hedge fund will manage some of its risk by shorting or betting against stocks they predict will benefit if their overall predictions are wrong. But Leobold was not doing this. Whoa, so he was not hedging. That's literally in the name. You're not hedging risk at all.

They're not allowed to take their money out. I mean, it's so fucking funny with these guys. They all just want to get domed so bad, dude. They just got fin-domed by a child. But even that he decided to bet against stocks like Adobe and Workday that would do poorly if AGI happened, Leopold would functionally be squeezed from both ends if his predictions ended up not being right. For a little while, it looked like this wouldn't happen. And in the first half of 2026, he reported a staggering 439% return for the fund. Hey, I came back out.

Okay. So you gave me a million. I came back out. We now have $5 million. Now listen to me. I know that you might just want your money back because you're going to get a million and then I could probably give you like three or four million more dollars, or I go back in and I put it all down again, okay?

Well, wait a minute, wait a minute. How do I know you're going to double my money? I mean, wouldn't the smarter- You don't get to know. You don't get to speak. What would the smarter move be to take my winnings now and we all walk away from the casino? Why do you have to go back in? Well, shit, that sounds very good.

In fact, you could even do better than that. you could get 100% of your money back, 100 more percent, and then still be betting big. But no, I have to take every single cent that I just walked out with and walk right back in, baby. The American Dream. Mm-hmm. Yeah, almost escaping the casino.

Almost getting out. The house almost not taking all your fucking money. Ironically, this massive increase in his stock would actually put him in a remarkably weakened position. And to understand why we should first look at a similar disastrous stock situation that happened in the same month in Korea. The Korean stock market, aka the Cosby, has long been relatively ignored by Korean traders, many of whom traditionally look to American stocks if they wish to invest their money on the market. This was until the Cosby began to climb rapidly in the middle of 2025,

as a result of two tech companies that greatly benefited from the AI boom, Samsung and SK Hynix. There was a new administration as well that ran on promising that the stock market would go up. Another reason why Koreans apparently didn't invest in the domestic market is that, Like, you have way less rights as a shareholder than you would in an American company. So it's like, well, if the company can fuck me over, that I'm not going to invest in this. But all of this change in 2025, new Korean administration, guy running on increasing the, you know, index up to 4,000, I believe. Just great stuff you want to hear, electing Mr. Wolf of Wall Street to your country. To put into perspective, in April of 2025, the Cosby Composite Index was at 2,400 points.

In May of this year, it has shot up to 8,000 points. with approximately half of the index value being from Samsung and SK Hinex. Li J. Myeong, the president who was elected in 2025, wanted to increase that even further. One way his administration would do so was through explicit attempts by Korean lawmakers to encourage retail investors, aka the average Joe who's risking his retirement money, to spend more on the domestic stock market. In May of this year, the Korean financial minister would introduce single-stock levered ETFs tied to the two tech giants that at this point made up an absurd amount of the Cosby's value.

Remember leverage investing from before? The thing that Leopold was left to use as much as possible for his fund, where you basically take out a loan from the bank to increase the size of your investment. But with the Cosby reaching absurd heights, the financial minister introduced the ability for anyone to easily make absurdly levered bets on their two tech stock giants. Oh, that's good. You want volatility in the general economy. That's very smart. You want everyone to bet incredibly levered on a volatile stock as well. Like, that's really...

Which I wonder what that causes. More volatility? I don't know. I haven't studied any of this shit, okay? I'm just spending all the money. With the government openly encouraging people to invest out of the implication that it was safe, retail investors poured at least 50 billion U.S. dollars worth of Korean won into the market. Many of these bets being five times leveraged. That means for every dollar you put into a stock, there's $4 of a loan you're taking from the bank.

Unfortunately, this incredible investor rally could not last forever. And with a combination of a lackluster first quarter related to AI, as well as an announcement from China's CXMT that had been developing Chinese computer chips at a faster rate than expected, the likely at this point very overvalued stocks that propped up the Cosby began to buckle. Here's where the massive downside of leverage bets come in. If your leverage position begins to go down, you take all of the losses and the bank, of course, take zero.

Meaning that if you're, say, four times leveraged in a position, as many Korean retail investors were, all of their money disappears if the stock goes down by 25%. Not good. Not good when you're investing all of your money onto a stock market that was later described as bipolar. Well, there's only up and down, so by definition. Of all of the disorders you want your stock market to have, bipolar is like the lowest. Schizophrenic, maybe below that.

I like a good dissociated market. I need an unjust stock market. I'm feeling like Trump is going to steal this next because he's going to say that you can take out payday loans to invest in crypto or something. Yeah. There is probably like not enough regulation on like how much retail investors in America can do. leverage stocks? No, actually, there's way more like control over that here than there is in, for example, England. Oh, really? Interesting. Oh, yeah. It can only be a certain portion of your total investment in the United States. Isn't that the rule? Yeah, there are limits on leverage.

Which is good. It's bad for your entire, like, middle class to take a shit ton of loans to invest into the stock market. That is not good for the economy. If your stock starts going down a lot more, you'll get what's called a margin call before all your money is wiped out. Because the bank, doesn't want to lose any money on your bad bet. And so they'll ask you to supplement the investment with money in order to add a cushion that the amount the stock has to lose before all your money is destroyed and the losses start eating into the bank's money.

If you're unable to provide this money, the bank will quickly liquidate the stock. According to Goldman Sachs, more than 1.2 million Korean investors received a margin call in about a month. It was like 1 in 30 or something of people in Korea got margin calls. It was absurd.

The Cosby would quickly punch nearly 40, percent as middle class retail investors were unable to supplement their levered investments and were forced to sell at a significant loss, triggering an even greater plunge in market prices as banks liquidated swaths of levered stock, causing even more margin calls that couldn't be answered, etc. Yeah, it's called cascading. And once it starts happening, it's essentially almost automated, you know, like if enough margin calls reach their, like the limit of the risk tolerance for the bank. Like, so it just automatically sells it all off. And then that causes another bank to automatically sell it all off. and that that causes another record. It's really cool. It's great. It's great. The market would eventually rally,

and the Cosby currently sits at around 6,700 points. So still at 100% increase from where it was a year ago. Yet this is no consolation for smaller investors, who do not have enough liquid capital to hold on to their investments. Most of these people's high-risk tolerance bets on AI had nothing to do with their belief in AGI, or whatever, but instead resulted from a government taking advantage of desperate rookie investors terrified by their lack of prospects.

Here's an example of one of the losers of the temporary crash from an Al Jazeera piece. When South Korea's benchmark Cospy index plunged nearly 40% from its June peak, Aun B's portfolio lost tens of thousands of dollars, throwing her wedding plans into doubt. Now I'm wondering if I should scale down the ceremony or skip the honeymoon, Eun B, who requested to be identified only by her first name, told Al Jazeera. Yet this trash is at all depressing. And heading back over to the US of A, Leopold's investments are not doing too hot either. For what we know now as a result of a recent 13F filing, he also had a major long position on SK Hynix,

and his other big bets had lost an average of 35% during June to early July, for the same reason that the Cosby began to buckle. To quote CNBC's senior bank and finance advisor, Leslie Picker, The FIR, run by former Open AI researcher Leopold Aschenbrenner, was piling into multiple names that ultimately bore the brunt of the AI sell-off. He had dramatically increased stakes in Micron and Sandisk during quarter two. So he's just like, he's putting more, money into the like hardware companies that are going to have experience a direct shockwave from

AI like not doing as well as people predicted as well as China developing its own domestic chips that are a bit better than people expected it turns out that before this bump in the road towards a GI Leopold's hedge fund may have controlled a hundred billion dollars in stock and he had 45 billion dollars in actual equity on certain positions he was reportedly four to five times levered the stock that he was shorting told a similarly grim story with anti-a-i stocks rallying to squeeze him at both ends It's not the type of squeezing at both ends you want to experience, folks. No. Leopold's investment firm ran into a problem when dealing with their own margin calls from banks.

Unlike the average retail investor in Korea, he didn't theoretically have enough money to save oppositions being liquidated. But it's pretty hard to casually sell billions of dollars of a volatile stock without rival firms noticing, mainly because those rival firms are the only ones who could actually buy that amount of AI stock on a random Tuesday. In late July, Leopold would send an I'm sorry letter to his investors, reporting on the losses. Dear partners, we let you down this month. We came closer to permanent capital impairment than is acceptable to us. While we ultimately found a solution that protected the fund and you as investors, our intention in running the fund is to never find ourselves in such a position in the first place.

Volatility is the price of long-term investment returns. Over the past two years, we have delivered outstanding results, despite occasional sharp pullbacks, but our fund must always be structured such that we can take a lot of, and fight another day. Permanent capital impairment. That's not good. With a fierce at home.

Bad. Capital I know is good. Yo, I hate saying that shit when I'm broke. Impairment bad, impairment bad, but permanent. Also bad. Babe, babe, tonight I have some capital impairment. Did you cast the bill? I'm no expert trader, but it seems to me that if you're expecting any amount of volatility in

the stock you're trading, you should probably not be levered to $100 billion with $45 billion in equity. But what do I know? Here's where I think the most common narrative of the story and what likely happened diverge relatively widely, according to how I've seen it reported at least. It was at this point that this letter served as the final nail in the coppin of Leopold's investment firm, with rival firms getting a hold of it

and supposedly shorting the AI stocks that they guessed Leopold was invested in. One of the reasons they were able to guess was because they were the only ones that either Leopold or the banks he was borrowing from, depending on the story, had offered to sell these stocks to in the past month. I know like Martin Screlli claims that he like got a call for like an absurd amount of money. It's a mass stock and he was like, I wonder if that's Leopold. I mean, that's a nightmare of situations.

Like, hey, God, you want to make a quick buck? Bet against this kid. Bet this kid's going to go be absolutely fucking ruined, possibly in prison. Yeah. For the 29th of July, just five days after the letter Leopold sent to investors, it was very clear that his firm was heading down an unstoppable spiral felt by many levered retail investors a month earlier in Korea. He was down 67% in the month.

While this would be an acceptable loss for a firm with Leopold's investment that was not levered, for him, it was catastrophic. Funny enough, searching on Reddit, I found plenty of investors who were in pretty similar positions to Leopold that were doing great. On the Value Investing subreddit, for instance, Singularity 42, a username which probably implies that this user too has situational awareness, writes this. I have many of the same stocks as Ashton Bruner. I was impressed how he was able to nail entries into especially the RAM stocks last year. The truth is these stocks are down, but nothing too crazy if you are even a bit diversified and not overly levered. My AI heavy portfolio is down less than 10%.

And I think it will rebound from my POV. The AI thesis is still strong and maybe even getting stronger. Recent models like Fable 5 slash Opus 5 slash Saul are incredibly impressive. Ashen Brenner must have been levered up to his tits if this wrecked his fund. Incredible. I am so like desperately outside of this world. Like, you guys might as well be reading a foreign language to me on a lot of, on a lot of this, like, terminology and understanding of like what these guys are trying to, what system these guys are even trying to game in the first place. It's all fake.

Yeah, it's all, yeah. You know what? Yeah. It's all fucking fake. Well, but there might be one or two listeners out there like Jake, you know, who are like, I wish I knew, you know, maybe could you break it down a little bit, like just for, you know. Okay, sure. Okay. So diversification is when you're invested in different things.

in different sectors that might do good, but they usually have inverse, like, relationships to each other, right? So it's like, if classically this sector does better when this sector does worse, you want to invest a bit in both because it's going to kind of balance your overall investment. Oh, like craps, kind of putting it on the, you know, hedging your bet on each sort of. Spreading your money out on all over all the crap. Yeah, yeah, okay, okay. And then also leverage, like essentially allows you to bet more money than you have.

So you put down $100, but you're really betting. 500 bucks. So then the house has to come and fucking bother you if you're even like at risk of losing a bet and say, hey, by the way, like, you know, you're betting, we noticed you're betting 400 bucks you don't have. Are you sure you want to do that? Because you will lose five times faster. And you don't listen. Okay. Something like that. Here's an interesting question. Why do they let people borrow more than they have? Well, that's just all debt. That's the whole economy. Now we're now we're talking about the structure of the whole economy. Debt is an important part of the development of capitalism, because if people take out debt

and invest more money into the economy, you can increase productivity. You know, they're doing so at a risk. And you've got one over on someone. I think the idea is that they use that money to a productive use, and then the people with the capital able to get that money back plus interest. Leads to more value being generated. If you take out money and then invest more into a business, and the business therefore makes more.

If it doesn't make anything at all, you're fucked, obviously. But this is a part of capitalism. Right. That's the gamble. How long can you live outside of your means? Okay. Now you're just hurting me personally. Now you're just offended me.

How long? How many days, Julian? Where are you? I mean, that's me, too. I literally am like, hmm, okay, well, I have a $50 PlayStation. gift card. So, like, if I get the ultra edition of 2K, then, like, I'm not spending quite, like, I'm, you know, look, I'm a bad boy, too. Jake, who told you to sell your doge at the peak?

Remember? Remember when I said, sell your doge now? You did. I told you. And who didn't sell it? Me did. Who's still sitting on their doge and a little bit of the Shibu Inu coin as well? Me. Oh, my God. I love that. You. you don't quite understand, you know, capital investment or debt, but you're invested in Doge. That tracks, actually. I'm a vibes. I'm a vibes. I'm a average voter.

Yeah, I'm a average voter. I'm such a good litmus test for your average American person. I'm slightly, slightly above average. The inherent contradictions are just part of the American makeup. I remember once because I was, I was in the gifted program when I was like, I don't know, in elementary school and I went to my mom and I asked her, if I was like special or a genius or something like that, because I gifted seemed to be like a very special,

you know, that seemed to be a very positive thing. And she said, well, we had you tested and you're slightly above average. So this, that makes sense. And I think it's important for people like, for brains like mine to really try to engage, you know, try to engage in the conversation because otherwise people like us were easily swept away. Yeah. And you know who else was swept away? Who?

Leopold Ashenbrenner. Yeah. but he was swept away to jail. I'm not an idiot, you know. Well, not yet. I mean, I don't think he's technically done anything illegal so far. That's the best part. Oh, well, never mind.

Leopold was now desperate for a complete bailout to stop a liquidity spiral. That is, someone to buy his entire book in order to pay off the money he owed. I saw some reports that at some point he was even at negative equity as a result of this leverage. So it would have just completely collapsed entirely, meaning he owed more money than he actually had in stocks. It was at this point that, according to the mainstream, narrative I've seen, Ken Griffin and Citadel stepped in. Griffin owns two separate firms named Citadel, one being a hedge fund, so the thing like Leopold is running, the other is a market maker called Citadel Securities. According to the theory, the latter firm supposedly helped facilitate

the dip in AI stocks that ruined situational awareness by predicting that the Fed would impose a sudden interest rate hike earlier in the month. While legally, these two entities are not allowed to collaborate in any way, the hedge fund, the other firm that he owned, was conveniently there when Leopold needed a bailout. That term might be somewhat misleading, as this was far more of a fire sale, with Leopold offering from 20 to up to potentially 50% off the value of his public book. Oh my God. That's so fucking crazy. He must have been so deep to be able to even think of offering something like this. My God. It's like the movement of his money was more of a danger than the actual sale itself. I don't know. This is like dizzying as someone who's who's a

least like, you know, studied a little bit of this as much as I need to, I guess. This is an amount that I've only seen brokeries describe as mouthwatering. I've seen it multiple times. Just a mouthwatering. But he needed to reportedly in order to pay off his debts. And as the dust settled, Leopold's firm set it a stable $10 billion, down from the 45 billion the month before. Five billion of this being liquid, when they still had from the fire sale after they paid their debts, and another $5 billion being an anthropic stock, a private company that has get to IPO and is so not publicly traded on the stock market, which kind of saved them because, like, as a result of it not being publicly traded, it has no effect on their debt. Like, the bank

can't sell a position in order to get their money back. Throughout all of this, Leopold was planning his own wedding, which would happen a few days after his catastrophic exit from the public market. He married, funny enough, the chief of staff to the CEO of Anthropic, whom he of course met at SBF's crypto exchange. Another fun fact I was reading today, the two were married by former New York Times columnist, Ross Douthat. That is so crazy. Squad goals. Squad goals.

How? The fuck did Ross Douthat just walk in? I don't know. Following situational awareness is fire sale, the AI market rallied, and Citadel would quickly liquidate at least 80% of the stock had purchased, and what I would imagine was a very nice profit margin. Ken Griffin said this in a letter. Our ability to distribute this risk was central to our investment thesis.

These moments highlight our ability to quickly evaluate complex risks, deploy capital with speed and conviction and execute with precision, aka we learned how to shiv somebody. Yeah. You may remember the name Ken Griffin because he and his headfront Citadel helped bail out Melvin Capital, one of the firms that was taking heavy losses due to retail traders buying GameStop stocks when it was shorting them. This drew the ire of amateur investors, as his other firm, Citadel Securities, had close ties to the Robin Hood app that these retail investors were using, which would halt the purchase

of GameStop stocks in the middle of the short squeeze. You can see the parallels with this story and the one concerning situational awareness. Both supposedly our cases where Ken Griffin's ostensibly completely distinct firms, whose headquarters are in the same building, acted in a way that helped the other one out. In the case of situational awareness, at least, the actual influence that Citadel's securities had in causing Leopold to default is at the very least overstated. Citadel the hedge fund may very well have saved millions on a multi-billion dollar deal through whatever effects that Citadel securities interest rate prediction had on the market,

but Leopold's firm was destroyed because it was an insanely leveraged bet on a very volatile set of stocks, with little to no actual hedging done if they were so much as even slightly wrong. I'm still entirely sure that the broader narrative is true, either, that what finally tank situational awareness was rival firms smelling blood in the water and shorting stocks that they knew he was leveraged into? Yeah, it's hard to like distinguish kind of relatively normal market movements in that situation. I mean, shorts build on anything and especially around something as volatile as AI. I mean, that's how the boom bust works. Yeah, but it's definitely like a flashier story that like this idiot wonderkin and his eight employees i mean it's what like fucking

aaron sorkin or feature or whatever we'll put in the movie yeah absolutely yeah that they're getting outplayed by these like you know these massive institutions that have slowly built up their wealth over like decades and have like risk management teams you would expect them to win over over this guy taken from the financial post a financial analysis company named s3 claim to see no increased intensity of shorts on situational awareness's largest public stocks. Instead of any clear pattern of predatory training, S3 Partners data shows that there was no significant increase in short sales across the fund's top holdings, according to the firm's founder, Bob Sloan.

Rather, the data show that while short sellers increased bearish bets on some of the funds holdings, half of the top 10 saw short interest flat or declining. So there's no increased shortings, basically. Yeah, so basically it just means, like, this dumbass launched himself into the sun and everybody else is trying to make a fucking movie out of it. Yeah, absolutely. It's funny if it's a bigger narrative, but it really is that he just was levered

on a really unstable stock. He rocks. He rocks, man. Being like, how old and you're just, like, given that much money? He's like, 24. It's like, you know what? I mean, he is the boomer whisperer.

Like, you know, he earned this through homework. Yeah, no, absolutely. It was something I was, like, grappling with because he clearly is, like, a very technically smart person. Just like, how are you this fucking stupid? Because, like, being a gambler and, like, over-leveraging, like, it's rewarded in the markets. People want higher and higher returns, right?

Especially in a volatile, like, scammie-ass market, like, exists now. And especially with the addition of crypto to general markets, it's like the people's, like, appetite for volatility is through the fucking roof. And, like, people have higher and higher risk tolerance. It's just junkies. Like, it's just a bunch of fucking degenerate gamblers. Facts. Myself included.

You know, these people. like we didn't grow up with gambling in our phones like gambling so easily like I remember the first time I ever heard of the concept of gambling was pogs and it was outlawed. It was outlawed during the, it was outlawed

at recess. You bring up poggs so much. I love that. I love that I've heard about pogs on this podcast. It's so many different like situations. Well, a lot of lessons were learned through that game. Through that game, pogs. I heard a story from

one of my friends, their friends was working like almost minimum wage shift and like for for dopamine when they were like bored sometimes they would take out their phone and just do like a $5 steak bet and just like 30 minutes of work or whatever. That's good. Microdosing. You're microdosing. That's not being a junkie. That's being totally normal. You're doing it like at a yeah, it's like therapeutic actually. I'll admit I got got by one of those like like digital trading card platforms or whatever where it's like they show videos of celebrities being like, Oh man, you just got like a $10,000 Pokemon card. Wow.

And I did it and I unlocked it. And I got like kind of a cool Pokemon card. And I was like, you know what? Like that's because you can also have it mailed to you if you don't want to gamble it back away. And you know what? It put me in a loop where I wasn't able to actually complete the transaction to like mail it to myself. And I realized I was like, oh, you're only, it makes this so difficult so that you just put it back into the machine and keep spinning. And I was like, oh, this, this is, this feels bad.

I've been had. It's like, I didn't, you know, it's like, whatever. I've thrown away, you know, 25 bucks and I guess like equally as stupid ways. But it was like, oh, it's just, it felt like lighting it on fire. If you need to get scammed, by the way, you should call me. Like, I could totally scam you, dude, if you want, if you need me to. It would probably be a better return, to be honest. I'll promise you all kinds of stuff.

Yeah, Julian just gets like a kind of a text after the recording being like, hey man, like what kind of scams you got? Genuinely interested. But the point I was trying to make is like I think these young people like gambling in the phone is just another aspect of life. This is something that humans do. This is something that we have in our phones. Yeah, I mean, I think it used to be, I mean, it's normal to just get a dopamine kind of like

released from the phone. but it used to be like low-stakes stuff, like, you know, texting and gaming and that kind of stuff. That was like, no, you're like your livelihood. Yeah, how much money you have in the bake. Your rent, that's a much bigger kind of like, I don't know, adrenaline rush than playing, you know, crazy birds or something. Well, crazy birds.

Angry birds. Sure, no, no, no, no, crazy birds. They've got a bunch of different kinds of different birds. What? Okay. All sorts of birds. There's crazy birds. There's depressed birds.

Okay. I'm going to kill you birds. Yeah. The biggest loser of this trading loss right now seems to be Jane Street, the New York trading firm that signed onto Leopold early, and were rewarded with a $15 billion loss. Situational awareness itself remains up 80% year-to-date and is apparently still attracting Silicon Valley Tech investors

who want to put their money into this, even though this just happens. But if you're worried I'm going to end this show on a low note, as I love doing with my episodes. A day before we recorded this episode, the New York Times broke the story that the SEC is now issuing subpoenas to banks at the firm board. from, to quote from the article. The subpoenas asked for details on the timing of situational awareness as trades and for its

communications with lenders about the money it was borrowing, also known as leverage. The subpoenas additionally warned the banks to preserve any information regarding the San Francisco hedge fund. Oh, boy. Uh-oh. It's looking like people are sniffing around. Uh-oh. I mean, you piss off a bunch of boomers.

That's the thing. It's like, when you're the boomer whisper and you're, you're the boomer whisper and you're, and you pull a fucking three card Monty on like a group of boomers, expect them to come with the pitchforks. And guess what? They still own the pitchforks in this country. Yeah. Yeah, you might be 24 years old,

but you could still be doing 30 years in jail. Yeah. I mean, when you, like, steal and lose a bunch of, like, very rich people's money and then, like, the general laws allow you to just get away with it, basically, you best believe they're going to railroad you on some bullshit. Like, a bunch of,

of people are coming for you. Yeah, that's the thing about, that's why, like, I'm surprised people, like, still try to operate in this world, because, like, the moment anybody can turn on you for their own gain, they'll do it. Well, I mean, yeah, this is the lesson that, like, Bertie made off and Sam Bickman-Free failed to heed was that you can rip off people. You can rip off people a lot. In fact, you could, like, live a whole life doing very well, ripping off people. But if you rip off a lot of rich people very quickly, you are fucked. Yeah. That's true.

That's a good fucking lesson. Yeah. Who knows what illegal shit they might have been doing. I mean, it was a firm ran by eight people and they were like leveraged to the gills. Like what other shit were they doing? I'm sure that's probably what the SEC is thinking right now as well. What other shit were they doing? Oh, and like the thing with these kinds of guys is they're always doing illegal shit, you know?

It's just like the degree to which it's like prosecutable. It can vary. and the will to prosecute and what regulatory body you happen to fall under the gaze of. But, yeah, it's like Travis said, you piss off in the fucking rich people, we're in a short period of time. You better believe that stuff will start happening to you. Yeah, because like the rest of us, they don't have the cardinal worry of, like, money. They already think they can get away with anything. That's what the whole thing is to be able to exert power.

They're better than you. Because they are. They got the money. That's so true. of it. They're better and they're better. They're just better. And they're faster than you.

So there's my attempt at a fine episode. I don't know how I did. Oh, it's good. Yeah. It's like fingers crossed, he goes to jail. It's about as good as we can hope nowadays. I don't even know. Like, to me, the feel of this is that they could get him on some bullshit that almost

everybody does, but like nobody gets prosecuted on. Because you're eventually going to have this stuff catch up. up to you because it's insane irresponsibility combined with like you basically said trust me you said trust me like don't even check trust me that was the funny thing with SBF is like he also did insanely illegal shit but like his investments i'm fairly certain have made back all of the money he's lost like it's not like they're necessarily stupid it's just that they're doing they're just they watch the wolf of wall street and they think that it's real and that they will be the wolf of wall street they forget that that's with penny stocks and people's pensions that you can rip up

off poor people at will. But also, like, you forget the end of that movie in which he also goes to jail. Yeah, but he is out of jail and he's selling, like, classes and, like, touring and shit. Like, my man has not suffered. Okay, right. Okay, I guess, yeah. Yeah, you can go sign up for his courses, like, right now. Like, he's a public figure.

In case you wanted, we were talking before about signing up for scams. That's a real one. You can do right now. Go get taken in by Belford on his, like, soft, soft phase. Yeah, if you don't mind losing your. freedom for a little bit, you can gain it back and turn it into some kind of entertainment career. Oh, Leopold Ashenbrenner, I'm going to miss you after this episode ends. Hopefully there'll be enough on Leopold Ashton Brenner soon that we can make another episode.

Yes, please. Bring him back soon, Liv. Please bring him back. Hopefully I can bring him back soon. I'm counting on it. Bring back the young boy. Show us that lad you brought us last time. Bring us one of your boys again. Bring us one of your young criminal boys. Bring us one of your live evil boys. You keep over there in the binder of yours. Okay, we got to close this shit right the fuck down.

Let's go. Thanks for listening to another episode of the QAA podcast. You can go to patreon.com slash QA and subscribe for five bucks a month. get a whole second premium episode for every regular one, plus access to our entire archive of premium episodes. Live! I know that you have some stuff to plug. Yeah, I have a Twitch stream, TwitchRTV says,

Livagar, and I'm going to be making YouTube videos. So go subscribe, LiveGar, YouTube. And also head to superstructurepodcast.com if you'd like to check out my solo project with John Gabris, where we vulgarize history. And we've been covering a lot of fun stuff. The latest one that we recorded, which should be out pretty soon, is on the 1988 Dolf Lundgren movie Red Scorpion. Oh, sick.

For everything else, we've got a website, QAApodcast.com. Listener, until next week, may the German boy bless you and keep you. We have auto-keyed content based on your preferences. Today I'm chatting with my friend Leopold Aschenbrenner. He grew up in Germany, graduated Valedictorian of Columbia when he was 19. And then he had a very interesting gap year, which we'll talk about. And then he was on the OpenAI Superalignment team, may it rest in peace. And now he, with some anchor investments from Patrick and John Collison and Daniel Gross and Nat Friedman, is launching an investment firm.

So Leopold, I know you're all right. You're actually a slow start, but life is long and I wouldn't worry about it too much. You'll make up for it in due time. But thanks for coming on the podcast. Thank you. You know, I first discovered your podcast when your best episode had, you know, like a couple hundred views. And so it's just been amazing to follow your trajectory and it's a delight to be on. Yeah, yeah.

Well, I think in the show, author and Trenton episode, I mentioned that a lot of the things I've learned about EI, I've learned from talking with them. And the third part of this triumvir, probably the most of the show, significant in terms of the things that I've learned about AI has been you. We'll go out of the stuff on the record now.