Leopold Aschenbrenner, a 23-year-old former OpenAI researcher, has gone from publishing a 165-page manifesto on artificial superintelligence to running one of the fastest-growing hedge funds in the AI sector. His San Francisco-based firm, Situational Awareness, now manages over $1.5 billion, despite Aschenbrenner having no prior professional investing track record. The fund gained 47% after fees in the first half of the year, far outpacing both the S&P 500 and technology-focused hedge fund benchmarks, the Wall Street Journal reported.
An AI-first investment strategy
Aschenbrenner’s approach targets global stocks tied to AI’s rapid development — from semiconductor manufacturers to power suppliers for AI data centres. He complements these with stakes in startups like Anthropic and selective short positions against sectors he believes will be disrupted. His recruiting has matched the ambition: Carl Shulman, an AI theorist with a background at Peter Thiel’s hedge fund, joined as director of research. Investors such as Stripe founders Patrick and John Collison, and former GitHub CEO Nat Friedman, have backed the venture, with many agreeing to lock up capital for years.
Other AI hedge fund contenders
The AI boom has sparked a flurry of new funds. Value Aligned Research Advisors, founded by former quantitative analysts Ben Hoskin and David Field, launched an AI-focused hedge fund in March that has already amassed about $1 billion in assets. Backers include the philanthropic foundation of Facebook co-founder Dustin Moskovitz. Meanwhile, billionaire Steve Cohen seeded portfolio manager Eric Sanchez’s AI hedge fund, Turion, with $150 million. Turion now manages more than $2 billion and is up about 11% in 2025 through July.
Riding a volatile theme
AI hedge funds are tapping into investor enthusiasm similar to the surges that fuelled past thematic booms, such as ESG and clean energy investing. But history shows that popularity doesn’t always translate into lasting success. The market dip after Chinese AI firm DeepSeek launched a disruptive language model in January exposed how quickly valuations of AI-linked stocks can swing. Still, many investors argue the long-term trajectory for AI adoption is clear, even if short-term volatility is inevitable.
Crowded bets and private plays
With only a limited pool of public AI-related companies, funds often overlap in their holdings. Vistra Corp., a major power supplier for AI infrastructure, has emerged as a top holding for both Situational Awareness and VAR Advisors. Some managers are also targeting private markets: Gavin Baker’s Atreides Management and Valor Equity Partners launched a venture fund investing in AI startups, including Elon Musk’s xAI.
A comeback bid through AI
For some, the AI boom offers a path back into high finance. Sean Ma, who shuttered his Snow Lake Capital hedge fund after settling SEC charges in 2023, has taken over M37 Management in California. He is now raising money for a hedge fund focused on AI software and hardware — another sign that investors are willing to bet big on the sector’s promise.
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