Leopold Aschenbrenner: the $40 billion margin call

Leopold Aschenbrenner and the leverage that brought down his $40 billion fund

At 25, most people are still paying off the mortgage on their first apartment. Leopold Aschenbrenner has just starred in the biggest margin call in history: his fund, set up to supply power to hyperscalers' datacenters, blew up with a 4X leveraged position and losses of between $30 billion and $40 billion. The figure isn't precise, but it doesn't matter: the number is so absurd that the nuance is cosmetic.

The young man's biography handles the astonishment well. He entered Columbia University at 15, graduated at 19 as number one in his class, and was snapped up by OpenAI, from which he left through the back door after leaking internal information. With that touch of arrogance, he set up a fund called Situational Awareness, focused on a business with an insatiable appetite for capital: electricity for the data centers of the cloud giants.

Everything that goes up in that sector can come down just as fast. The margin call came and the fund exploded, but the carnage became a antiestéticast for others: the next day, positions bought by Citadel rebounded almost 30%. "Volatility will always exist, and leverage is a double-edged sword that can wreck your portfolio," sums up a fund manager who prefers not to give his name.

The best part is the sarracena of the story. Losses in the billions don't drive anyone under a bridge; that risk only comes when you lose hundreds of thousands. Aschenbrenner got married six days after the collapse, the event having done nothing to change his life plan. The hyperscalers keep devouring electricity and high-capacity capitalism looks the other way again. Next time, better with less leverage.