25-year-old AI investing genius Leopold, basically the big brother of the AI investment circle, just got targeted and taken down. He blew up in Silicon Valley with a 165-page paper called *Situational Awareness*, earning the nickname 'AI Prophet.' In 2024, he turned that narrative into a hedge fund with the same name. No traditional investing background, but his connections were solid, and the money came fast. The fund was basically all-in on AI infrastructure—chips, storage, electricity, data centers—while shorting traditional software stocks. He used about 4x leverage. First-half returns hit 439%, and since its inception, the fund grew over tenfold, with assets under management once hyped to over $20 billion, maybe even higher. Then in July, AI hardware stocks collectively tanked, and many of his heavy positions got slashed in half. Meanwhile, the software stocks he shorted went up, hitting him from both sides. With leverage magnifying the losses, banks started issuing margin calls. Others in the market noticed too. His positions were concentrated and public, so they directly targeted his stocks, accelerating the drop. Classic hunting strategy. On the night of the 29th, the fund scrambled to find buyers to offload positions. After an overnight bidding war, Citadel scooped up about $16 billion worth of public stock positions (long and short included) at a discount of over 10%. Millennium and Jane Street couldn’t beat them. Public positions were basically wiped out, and the fund’s size dropped to around $10 billion, with private holdings still intact—about $5 billion in Anthropic included. July alone saw a 67% loss, but the fund was still positive for the year thanks to earlier gains. Later, he wrote a letter to investors apologizing, admitting he almost caused permanent losses, and promised not to use bank leverage again. Ironically, after he liquidated those positions, the stocks rebounded.