Zerohedge: A Record-Loss AI Fund Returns to the Same Risky Trade

Summary

Just weeks after a record-setting collapse, Situational Awareness is reportedly rebuilding aggressive bets in many of the same technology stocks that fueled its losses. The hedge fund, run by 24-year-old former OpenAI employee Leopold Aschenbrenner, had used heavy leverage to concentrate on high-momentum names including AMD, Sandisk and Bloom Energy. Now, according to reporting cited in the account, it has begun trading again through new brokerage relationships, including Clear Street. The renewed positions reportedly target AMD, Intel, SK Hynix, Sandisk, CoreWeave and other AI-linked companies. Nomura observed a mystery buyer spending $315 million in options premium, creating $1.1B of delta and $5.8mm of vega through customized “flex calls.” Several underlying stocks then surged over 2 sessions, including AMD by 10.9%, Bloom Energy by 17.5% and CoreWeave by 18%. These deeply out-of-the-money calls can amplify rallies when dealers hedge their exposure, potentially helping ignite a gamma squeeze. Unlike total return swaps, however, fully paid options limit losses to the premium initially committed. The central risk remains substantial: the trades are concentrated in volatile, sometimes illiquid stocks, and their success depends heavily on momentum continuing. If prices reverse or implied volatility falls, the options could rapidly lose value, producing another major setback despite the formally limited downside.