Valuetainment - August 06, 2026


Leopold Aschenbrenner - Inside The $45B AI Bet That Unravelled


Episode Stats


Length

16 minutes

Words per minute

190.28

Word count

3,215

Sentence count

271


Transcript

Transcript generated with Whisper (turbo).
00:00:00.480 Recently, our company's softball team lost the big game by one run.
00:00:04.780 Then Dale tried to console us with the quote,
00:00:07.200 winning isn't everything.
00:00:09.060 Well, Dale and I are very different.
00:00:12.740 I get early payout from Bet365.
00:00:14.680 If my team goes up big, I get paid out instantly,
00:00:17.480 even if they blow the lead later.
00:00:19.540 Sound familiar, Dale?
00:00:21.280 Thanks, Bet365.
00:00:22.920 Must be 19 or older, Ontario only.
00:00:24.420 Please play responsibly.
00:00:25.240 If you have questions or concerns about your gambling
00:00:26.660 or the gambling of someone close to you,
00:00:27.720 please go to connexontario.ca TNC Supply.
00:00:30.000 A story of a guy named Leopold Ashenbrenner.
00:00:33.300 Okay?
00:00:33.620 Very interesting story.
00:00:34.820 And let me tell you what happened with this story.
00:00:36.780 This guy, born in Germany, at 15 years old, he's a phenom.
00:00:42.660 He goes to Columbia University.
00:00:44.460 He becomes valedictorian of the university at 19 years old.
00:00:49.180 At 15, he goes to this college.
00:00:50.420 He goes 15, goes to university.
00:00:52.240 At 19 years old, he graduates valedictorian from an Ivy League school in 2021.
00:00:59.380 immediately starts working for SPF's philanthropy leg that he has.
00:01:04.280 Then from there, he joins OpenAI, works for Sam Altman from 2023 to 2024
00:01:10.940 on their super alignment project on AI safety and a couple other things.
00:01:15.920 Then he leaks information, I believe, to an executive of Anthropic.
00:01:21.540 Because of that, he gets fired.
00:01:22.940 When he gets fired, about a year and a half ago, two years ago,
00:01:26.440 He writes a report that goes viral, a 165-page report that he writes.
00:01:32.900 He calls situational awareness.
00:01:34.740 When he writes this report, guess who reads it?
00:01:37.700 Every major AI investor, all the billionaires are like, what is this all about?
00:01:44.900 Because of that, he gets interest from people.
00:01:47.780 He creates his own hedge fund, Vinny, called situational awareness based on the report that he wrote.
00:01:53.040 He gets approached by the founder of GitHub.
00:01:55.060 He gets approached by folks that are, I believe, with brothers that started Stripe, if I'm not mistaken, the billionaire brothers.
00:02:02.800 And instead of, like, going out there and getting money from the bigger guys, he gets money from billionaires.
00:02:07.840 And next thing you know, it starts off with $225 million.
00:02:10.640 And he says, rather than investing where everybody else is investing, we're going to go to a different place.
00:02:15.800 We're going to invest in the people that are building the infrastructure.
00:02:19.780 So he's going to complete.
00:02:21.000 He bets on AI infrastructure.
00:02:22.520 His biggest, single, largest holding was a company called Nebius, N-B-I-S.
00:02:27.840 At one point, 40% of portfolio was just this company.
00:02:31.400 Can you type in Nebius, N-B-I-S, so we can kind of look it up on what they do,
00:02:34.640 just kind of go to their profile?
00:02:36.360 The other companies that he invests in is SanDisk, Memory Chipmaker,
00:02:39.600 Micron, CoreWave, SKH, and Korea.
00:02:42.260 The ones he shorted, shorted means you're going up against.
00:02:45.260 Like, these guys are not going to make it.
00:02:47.400 Adobe was one of them that he shorts against.
00:02:50.100 And, you know, why would you short against Adobe?
00:02:52.280 Well, first six months of the year, this guy is Warren Buffett on steroids.
00:02:58.080 He is Jim Simons on steroids from Renaissance Technologies.
00:03:02.360 The first six months of the year, his return, if you invested with him,
00:03:06.840 made 439% Vinnie in six months.
00:03:10.820 Do you know how long it would take you to make 439%?
00:03:13.400 So think about it this way.
00:03:14.340 Investment company, Active America Mutual Fund with American Funds,
00:03:17.100 since the last however many, since 1934, I believe, has done 12%.
00:03:22.280 12% would take you 30 years to get 439%.
00:03:26.760 Give or take, it's not 30 years, but it would take you 20 years
00:03:28.860 to get that kind of return.
00:03:30.000 He does it in six months.
00:03:31.380 Now everyone's coming.
00:03:33.040 Now you got like, hey.
00:03:34.280 Take my money.
00:03:35.020 You got money from everybody.
00:03:36.820 We're talking the bigger guys are now showing up.
00:03:39.200 It's like, hey, do you need more money from us?
00:03:41.720 So his fund goes from $225 million, $2 billion to $2 billion to $45 billion.
00:03:48.800 How long?
00:03:49.160 But what the guy in 18 months.
00:03:50.500 But Vinny, so at this point, he's a billionaire.
00:03:53.060 He's putting up his wedding, big wedding he's putting up in Carmel.
00:03:55.760 He's going through his wedding, but he does a margin call.
00:03:59.320 Which is what?
00:04:00.420 Here's how it works.
00:04:02.340 When I was 20 years old, I got out of the Army.
00:04:04.780 I come out and I buy some stocks.
00:04:07.400 And then it was either E-Trade or I think it was E-Trade.
00:04:09.880 They're like, hey, you know you can do margin on this.
00:04:11.420 How does margin work?
00:04:12.680 You put up $2,000, we'll give you $2,000 of debt.
00:04:15.500 No way.
00:04:16.160 Yes.
00:04:16.960 And I'm like, this stock's going to go.
00:04:18.600 So you put it in, so it's $2,000, just think about $2,000 on credit card debt, $2,000 of your own money.
00:04:25.460 Okay.
00:04:25.940 Which means if you make 50%, you really made how much money?
00:04:30.460 100%.
00:04:30.860 Yeah.
00:04:31.460 So then you pay off your debt and you keep that money.
00:04:34.320 But you didn't make, you made 100% of your money.
00:04:36.040 Yeah.
00:04:36.560 You know how much margin this guy does?
00:04:38.220 In some cases, he's 4X margin.
00:04:40.920 That means for every billion dollars, he's borrowed $3 billion.
00:04:45.340 Which means if the money goes up 25%, you didn't make 25%.
00:04:49.540 You made 100%.
00:04:50.960 But if the money goes down 25%, you lost all of it.
00:04:54.920 Bye-bye to all of it.
00:04:56.180 Now, not all of it was margin.
00:04:57.720 Some of it was margin.
00:04:58.620 So he blows up.
00:04:59.940 He goes up.
00:05:00.720 The next thing you know, they're sitting there wondering what's going to be happening,
00:05:04.700 what will take place.
00:05:06.080 And then the market tanks.
00:05:07.740 At the same time, all the ones that he bet on, they dropped 35% in one month.
00:05:13.300 NBIS, SanDisk, Micros, CoreWave, all of them drop roughly 30.
00:05:18.720 You heard what I just said to you.
00:05:20.000 So imagine, you ever seen the movie Margin Call?
00:05:22.200 Yeah, which is Evan Spacey.
00:05:23.580 Most stressful thing you see drops 35%.
00:05:26.960 And while he does that, the stock he shorted, Adobe,
00:05:30.680 guess what happened to Adobe?
00:05:31.720 It goes up.
00:05:33.640 This is the GameStop story, but on steroids.
00:05:36.220 This is the definition of high risk, high reward.
00:05:38.300 Adobe goes up, and according to CNBC, prime brokers,
00:05:43.300 of Bank of America, Goldman, JPMorgan Chase, started calling him.
00:05:46.960 And on July 30th, it was over.
00:05:48.980 CNBC reported a fund exited almost all of its public investments.
00:05:53.400 Roughly two-third was in public equities.
00:05:55.920 And the person that got involved, and this is how he makes his money,
00:05:59.080 which I'm going to go to Vinny.
00:05:59.960 By the way, I'm going to give a quick shout-out to this guy.
00:06:02.700 I'm going to go to Tom.
00:06:03.700 I want to give a quick shout-out to Alex Tamiz from Live Trading Investing Club.
00:06:07.840 I watch a lot of videos.
00:06:09.100 His breakdown was the best one out of everybody.
00:06:11.020 Shout-out to you, Alex, if you're watching this.
00:06:12.820 Phenomenal job on the way you broke this thing down.
00:06:15.160 And then Citadel's, Ken Griffin comes in.
00:06:18.420 He says, don't worry about it, guy.
00:06:19.800 I'll bail you out.
00:06:21.060 I'll bail you out.
00:06:21.700 Now, the fund goes from zero to $45 billion.
00:06:25.720 Now it's down to $10 billion.
00:06:27.500 And everyone's thinking this guy's completely down, wiped out,
00:06:30.380 doesn't have a penny to his name.
00:06:32.160 He's still worth $300 million.
00:06:33.660 So if you're worried about it, he's doing okay.
00:06:35.000 Tom, walk me through what happens next with Ken Griffin.
00:06:38.480 So what's very interesting, Boca Raton's own Ken Griffin,
00:06:41.540 who went to a public high school in Boca Raton,
00:06:43.360 opened up a math class.
00:06:44.680 Like someone I know, you also went to a public school.
00:06:46.180 My sister was at the high school the same time he was.
00:06:50.400 He's a little younger than me.
00:06:52.180 But that guy grows up, builds Citadel,
00:06:56.580 leaves Chicago, building the big thing in Miami.
00:06:59.200 Welcome back to Florida, Ken.
00:07:00.760 So here's what happened.
00:07:02.600 So somebody needs to provide liquidity to the market.
00:07:06.220 Otherwise, there is going to be what's called a cascade.
00:07:08.480 A cascade is another fancy word for effing waterfall.
00:07:13.940 And an effing waterfall, where everything starts going, Vinny, they call it a cascade because if you're in the boat and suddenly a waterfall breaks, the current picks up, your boat starts traveling in the current, and you get pulled over the waterfall with everybody else.
00:07:29.040 So you need liquidity providers to come in.
00:07:31.500 A liquidity provider could be a white knight.
00:07:33.800 Well, so half of the people are saying, Ken Griffin, this predator, it was a distressed purchase. He bought it at a discount. He's just buying until the rebound. Okay, okay, okay. You're going to go with that? Those are the cynics.
00:07:48.660 The other side are saying this, saying, thank God Ken came in and prevented the cascade and created a relief rally because he provided liquidity.
00:08:00.740 What did he provide liquidity for?
00:08:02.800 What was this?
00:08:03.460 When it's a margin call, you know what they do with all those stocks represented?
00:08:06.620 Number one, you have to cover your debt.
00:08:08.580 They have you sell all the stocks urgently, and that money goes to pay the debt called the overhang.
00:08:15.080 Make sense?
00:08:15.540 But when you're selling all those stocks, what does everybody at Wall Street do?
00:08:19.700 They look up at the big board and they go, wow, what the hell's going on, man?
00:08:22.800 Everything's selling.
00:08:23.900 It's a sell-off.
00:08:25.000 Oh, my gosh, it's a sell-off.
00:08:26.520 Hey, get in.
00:08:27.180 Don't get left out.
00:08:28.300 Sell now before it goes down further.
00:08:30.500 That's the cascade.
00:08:31.480 Make sense?
00:08:32.000 Got it.
00:08:32.380 Ken Griffin comes in and goes, wait a minute.
00:08:35.000 I'm going to go buy it.
00:08:36.020 So he bought the entire book of positions and injected liquidity into the market.
00:08:42.260 And rather than all of those being sold like wild on the market, Citadel bought them.
00:08:48.740 Enter the cynics who then say, boy, I guess he sure made it well.
00:08:51.880 Wait a minute.
00:08:52.340 Wait a minute.
00:08:53.160 Luck is where opportunity makes preparation.
00:08:55.860 Yep.
00:08:56.180 Ken Griffith had liquidity on the balance sheet on behalf of the Citadel investors to take advantage of opportunities for Citadel.
00:09:04.580 So, number one, he served his own customers.
00:09:06.620 Number two, what people don't see and what I've read and what people are talking about this morning is that Citadel provided liquidity and it didn't get sold on the open market like a wild party.
00:09:19.420 And that's where it went.
00:09:20.560 So I think at the end of the day, did Ken Griffin act self-interested?
00:09:25.040 Sure, he did.
00:09:26.060 Did he act for his people?
00:09:27.480 Sure, he did.
00:09:28.140 Did he get a discount?
00:09:29.260 Absolutely.
00:09:29.940 Is it going to pay off for him?
00:09:31.300 Yes.
00:09:31.600 But we also didn't have a cascade and a waterfall happening.
00:09:35.820 But, Tom, how risky is it to do margin call the way this guy did it?
00:09:42.120 How risky?
00:09:43.100 Have you ever bought stocks on margin?
00:09:46.020 I've bought stocks on margin, but I've never bought stocks on margin in volatile areas.
00:09:52.320 I was tempted to buy on margin way back at the time.
00:09:55.480 I had friends that were buying.
00:09:57.120 Do you remember Akamai, Cisco, Juniper Systems, Sun?
00:10:01.280 JDS Uniface, all those guys.
00:10:03.180 JDS Uniface, EMC.
00:10:04.140 Qualcomm, QQQ.
00:10:05.420 exactly exactly yes you know what all those are vinnie we're just naming them what guess what
00:10:10.500 that was the infrastructure of the internet this guy was buying the infrastructure of ai yeah and
00:10:15.980 i had friends that were buying on all that they said hey every day the internet goes up it's more
00:10:20.380 lucent chips it's oh cisco uh routers it's more of that and there were two companies in there that
00:10:26.060 everybody got jumping on one was worldcom and one was global crossing i remember this distinctly
00:10:31.580 And so I had friends doing it, and I said, listen, I basically can't say anything to you because WorldCom was trying to buy Sprint, and I kept my integrity.
00:10:46.080 I did not talk to friends when I knew it was going on WorldCom and Sprint.
00:10:50.200 WorldCom attempted to buy Sprint, and then the deal broke, and Bernie Ebers, CEO of WorldCom for other things, ended up in jail.
00:10:58.340 And then Global Crossing had a guy named Gary that was from Beverly Hills, if you look it up.
00:11:03.620 He ended up in trouble.
00:11:05.160 I knew that was coming.
00:11:06.540 So I was really worried about what's called the pipes, all the fiber and all the telecom.
00:11:11.800 I was worried about the pipes.
00:11:13.180 And I thought, man, I don't know about this.
00:11:15.600 So I did not buy Internet on margin, but I had many friends did.
00:11:21.120 And guess what?
00:11:22.060 Similar things happen.
00:11:23.180 Not on the order of Leopold.
00:11:24.940 Similar things happen.
00:11:26.300 Have I bought on margin things like Northwell and losing?
00:11:29.500 Yeah, so it was just a question.
00:11:31.740 I'm just wondering, like, if you had done it or not
00:11:34.280 and what happened with your experience.
00:11:35.500 I bought on margin myself.
00:11:37.100 And when you don't, like, when you go through it,
00:11:39.960 like, when they call you, it's like, hey, man,
00:11:42.060 you've got to pay that debt back.
00:11:43.860 And then if you don't have it, you're like,
00:11:45.420 how do you want me to pay that?
00:11:46.280 You don't have a choice because you have to guarantee.
00:11:48.520 But some of these guys, that was on $2,000, $4,000.
00:11:52.380 I'm 20 years old.
00:11:53.060 I just got out of the Army.
00:11:53.980 I'm trying to be a stockbroker.
00:11:55.020 You know about $45 billion, and you're doing it 4x margin, and people are okay with it.
00:12:02.400 By the way, the number goes from zero to $45 billion.
00:12:05.700 It's down to $10 billion.
00:12:07.020 But you know what it still tells you?
00:12:08.540 $10 billion of money.
00:12:10.120 Still trust this guy.
00:12:11.400 Of course.
00:12:12.080 Of course.
00:12:12.760 With the positions that he has, and he's still worth a few hundred million dollars.
00:12:15.460 He's not going to be going away.
00:12:16.920 He just went out there and took a massive risk, and the timing of it, we'll see where
00:12:22.260 this guy's going to be next, what he does next.
00:12:24.160 A lot of times when you get guys like this at 23, 24 years old, you're going to hear this guy's name more and more and more on things he may be doing later on.
00:12:33.180 But I think he's going to be now having a little bit more protection of people watching.
00:12:37.060 And this is pretty much the last chance for all of you because we've got less than 30 days left for the vault.
00:12:41.100 And I'm going to give you guys a surprise attendee that will be there in the CEO session that I'll be announcing today.
00:12:46.760 so hang tight. But first, I want you to watch the highlight of what happened last week at our
00:12:52.560 campus during the Vault Networking event. Go for it. I believe in something very powerful. You are
00:12:57.040 the sixth person of the five people you surround yourself around. The Vault is literally, in my
00:13:05.280 opinion, the pinnacle of the crowd and the individuals that you should be around if you
00:13:10.640 on a level up. That's why we're here. We are at the pre-Vault networking event where we had private
00:13:18.220 jets, supercars, CEOs, founders, executives coming from all across Florida, even from different states
00:13:24.540 and even from different countries to start networking with other entrepreneurs that are
00:13:28.660 going to be at the vault conference. Look at that stud on the left. Mario. Buy a ticket, whether you're
00:13:36.580 starting off at a general or even an executive like work your way up just because i feel like
00:13:40.760 the perks of even a general admission ticket is very good you kind of get to mingle with everyone
00:13:44.380 and i think pat does a great job of that you know just because you don't have a ceo ticket it doesn't
00:13:48.220 mean that you can't connect with everyone recently our company softball team lost the big game by one
00:13:54.040 run then dale tried to console us with the quote winning isn't everything well dale and i are very
00:14:01.720 different. I get early payout from Bet365. If my team goes up big, I get paid out instantly,
00:14:07.480 even if they blow the lead later. Sound familiar, Dale? Thanks, Bet365. Must be 19 or older,
00:14:13.860 Ontario only. Please play responsibly. If you have questions or concerns about your gambling
00:14:16.680 or the gambling of someone close to you, please go to connexontario.ca and see supply.
00:14:26.520 Everybody is welcoming. People will do business with you. Your politics don't matter.
00:14:30.900 the dollar matters, making the money matters,
00:14:33.640 making the connection matters, and so you need to get to the vault.
00:14:35.900 Is that Jared?
00:14:36.900 Is that who I think is the name?
00:14:38.240 Love Sniper.
00:14:39.900 Buy your ticket.
00:14:40.900 Go buy it.
00:14:41.900 Buy your ticket.
00:14:43.900 See you at the vault.
00:14:45.900 That's cool.
00:14:46.900 Time to secure your access, and we'll see you in Vegas,
00:14:49.900 August 31st through September 3rd.
00:14:51.900 We'll see you at the vault.
00:14:53.900 Amazing.
00:14:54.900 It's by the end of the month.
00:14:56.900 Literally, I can literally say it changed my life.
00:14:59.900 There you go, baby.
00:15:01.540 Go to vault2026.com.
00:15:03.100 Go to vault2026.com.
00:15:05.220 Stephen Bartlett, who made $42 million last year podcasting.
00:15:08.920 Logan Paul, who's about to be a billionaire.
00:15:10.820 He's all over the place.
00:15:12.420 You got Joe Montana and Jerry Rice with possibly,
00:15:16.820 you know who may interview them?
00:15:18.300 Possibly.
00:15:18.760 You may interview them.
00:15:19.720 Had a conversation with them yesterday.
00:15:21.360 Stephen A. Smith may interview them.
00:15:22.620 Stephen A., have you ever interviewed those two together?
00:15:24.460 He says, I never have.
00:15:25.360 How about you interview them instead of me
00:15:26.920 because it'll be an exciting one.
00:15:28.140 And, you know, and then we have Dan Martell, AI, he'll be there.
00:15:32.120 And on top of that, at the CO session, those guys that are going to CO,
00:15:35.600 you've got bigger decisions to make.
00:15:37.300 I went and got the number one lawyer in America that will be at that event with us.
00:15:40.540 This is the lawyer of the top seven out of top ten richest people in America
00:15:44.600 use him as a lawyer, Alex Spiro, who is Musk's lawyer, who is Bezos' lawyer,
00:15:49.800 who is probably the most feared man in law in America.
00:15:54.080 He'll be in the CO session.
00:15:55.520 Those of you guys that didn't even know the COs,
00:15:57.360 you'll get a chance to ask Alex a question at the end of the interview,
00:16:01.300 end of, what do you call it, the CO session together.
00:16:03.900 So if you haven't registered, go to Vault 2026, register.
00:16:06.880 We will see you guys at MGM again, vault2026.com.
00:16:10.960 Bring your spouse, bring your partner, bring your peers.
00:16:13.180 Don't come along.
00:16:13.800 We look forward to seeing you there.
00:16:14.720 If you enjoyed this video, you want to watch more videos like this, click here.
00:16:17.360 And if you want to watch the entire podcast, click here.
00:16:20.160 recently our company softball team lost the big game by one run then dale tried to console us
00:16:30.360 with the quote winning isn't everything well dale and i are very different i get early payout from
00:16:37.800 bet 365 if my team goes up big i get paid out instantly even if they blow the lead later sound
00:16:43.900 familiar dale thanks bet 365 must be 19 or older ontario only please play responsibly if you have
00:16:49.480 Questions or concerns about your gambling or the gambling of someone close to you,
00:16:51.780 please go to connectsontario.ca and see supply.