Forget NVIDIA | This 24-Year-Old's $4.5B Bet on AI's Real Problem (Leopold Aschenbrenner)

Josh: So there's this guy named Leopold Aschenbrenner. He's 24 years old and last year Josh: when we covered him on one of our old episodes he was only 23.

Josh: He was managing a billion dollars and he was responsible for investing in new Josh: frontier AI ideas and technologies.

Josh: Today that one billion dollars one year later is worth five and a half billion dollars.

Josh: This guy who is younger than both of us by a pretty large margin just went on Josh: a generational run that made him basically more money than any other fund in the world of AI.

Josh: And the fact that AI is the hottest market means the competition is stiff.

Josh: So clearly this guy, Leopold, he's doing something different than everyone else.

Josh: And what's just happened in the last week is his new 13F filings came out.

Josh: So we could actually get a look into what he has been trading.

Josh: So that's what we're going to do here.

Josh: We're going to go through the filings. We're going to see what this guy has Josh: been up to that has yielded him five and a half billion dollars of money to manage now.

Ejaaz: He did this in 12 months as well. So his fund started at the end of 2024 at a right $255 million.

Ejaaz: And then within six months, he had outperformed the S&P 500 by eight times, Ejaaz: growing it to $2 billion. Right.

Ejaaz: And then since our last episode, where we spoke about his Q3 fund filings, Ejaaz: he's gone up one and a half billion dollars.

Ejaaz: So he's on a generational run. And like you said, he's like super young.

Ejaaz: He's done a pretty major pivot, but it's all in accordance to, Ejaaz: I guess, his Bible, which is called Situational Awareness.

Ejaaz: And it's 165 page essay where he basically predicts that we're going to reach Ejaaz: AGI by 2027. And in this massive essay, he basically writes a story of how he Ejaaz: sees the AI revolution unfolding.

Ejaaz: And I've got to say, he's pretty much nailed it.

Ejaaz: He called the GPU infrastructure run, and now he's calling a very important Ejaaz: pivot that we're about to get into.

Josh: Yeah, I think the entire thesis is a pivot from kind of chips to infrastructure.

Josh: And what we're seeing on screen here, actually, this is very cool.

Josh: He used Claude to create an artifact that is going to walk us through the entire Josh: changelog that happened between last year and this year.

Josh: Perhaps starting with what he dumped because these positions that he dumped Josh: were pretty large and these include names like nvidia where he dumped 300 million Josh: dollars input options in one quarter right.

Ejaaz: Yeah yeah so a lot of these names that you're Ejaaz: going to see on the positions that he exited are very popular names that a lot Ejaaz: of people are invested in right now so then it begs the question why has he Ejaaz: just exited one billion dollars worth of these companies he's dumped nvidia Ejaaz: he's dumped broadcom he's dumped tsmc he's dumped micron these are all the big Ejaaz: AI infrastructure companies.

Ejaaz: He actually made money on dumping NVIDIA, by the way.

Ejaaz: He held a $300 million PUP position, which means that because NVIDIA price went Ejaaz: down over the last couple of months, he's likely made money on it.

Ejaaz: And so it begs the question, why is he doing this?

Ejaaz: Well, if you read his 165-page essay, he talks about how sometime by the end Ejaaz: of 2025 and the start of 2026, Ejaaz: He thinks that a lot of the market would have priced in the value of GPUs.

Ejaaz: And that is coming from companies like NVIDIA and Broadcom, who kind of like Ejaaz: create these chips and then stack these chips ready for AI labs like OpenAI Ejaaz: and Anthropic to train their models on.

Ejaaz: And now he moves his focus onto the major constraint that investors haven't Ejaaz: really invested in just yet.

Ejaaz: Energy and infrastructure. The issue that a lot of AI labs face today is one, Ejaaz: not only do they have too many GPUs, but two, the energy grid that we have today Ejaaz: is built to serve humans and not the massive AI demand that we face today.

Ejaaz: And that's where his investments are focused on.

Josh: And I'm getting a kick out of seeing the NVIDIA puts being sold and just like Josh: exiting NVIDIA entirely.

Josh: Because when I talk to my friends, when I talk to average people on Wall Street, Josh: when you turn on CNBC, NVIDIA is the company.

Josh: NVIDIA is the biggest investment. And to see him pivoting away from that, I Josh: think is a testament to him just again being ahead of the Josh: curve moving to where things are going and not where they Josh: have been which in his mind is this infrastructure Josh: it's this moving away from the ships into the infreplay and that's probably

Josh: where we can get into what he added because these are the stocks that you want Josh: to pay attention to this is what he currently owns this is what he believes Josh: are going to go up and if it's true we should see some pretty hefty returns Josh: from these so where do we start with the additions this quarter well.

Ejaaz: Thanks to our friend Claude, we've got a really neatly illustrated stack of Ejaaz: all of his investments bucketed into the AI technology stack.

Ejaaz: So we've got power generation, real estate and facilities, compute and hosting, Ejaaz: connectivity, storage and memory, chips and silicon.

Ejaaz: Actually, I wanted to just round out the last segment, Josh.

Ejaaz: I noticed that he made a trade on Intel down here. And what he cleverly did was he sold the equity.

Ejaaz: So he sold the shares that he has, but he still has a massive long position open.

Ejaaz: So he's kind of freed up liquidity to shove money in other companies.

Ejaaz: And the major companies that he's put money into is power generation, Ejaaz: particularly this company called Bloom Energy, which until about three months Ejaaz: ago, no one had really heard of.

Ejaaz: But they specifically build power generation turbines that help you generate Ejaaz: power to power AI data centers.

Ejaaz: And he's built a massive position in this to the tune of $855 million.

Ejaaz: Maybe it says 876 here, but the farting says 855.

Josh: Bloom Energy being the number one position is different because it has absolutely Josh: nothing to do with the chip stack and it accounts for 20% of the entire portfolio.

Josh: And I was doing some research on what they do and it's actually kind of interesting.

Josh: They create these like oxide fuel cells which Josh: is a fancy way of generating electricity on site Josh: from natural gas so a lot of times when natural gas is fed into Josh: these data centers it has to go through a turbine which Josh: like heats and cools things and it's a very clunky energy creation Josh: process what these bloom boxes do is they take

Josh: that natural gas and have a fuel cell that converts it right on site Josh: to usable electricity for the data centers and it's modular Josh: it can be deployed quickly and there doesn't Josh: seem to be a shortage of it i believe they're set to create two gigawatts of Josh: this um just this year so it's an interesting play on power because i was looking

Josh: for the nvidia of energy like who who is the chip maker but for energy and i Josh: don't believe there is one and there's a world in which perhaps bloom could be that person so i.

Ejaaz: Actually looked into their uh recent finances they're a public company they Ejaaz: have a 20 billion dollar demand backlog um their revenue was up like something like 34% in 2025, Ejaaz: and they're projecting another 40% increase in 2026, after that 2025 increase.

Ejaaz: So there's like no shortage of demand.

Ejaaz: You mentioned fuel oxide cells.

Ejaaz: The reason why their gas turbines specifically are super attractive, Ejaaz: is you don't need to rely on the energy grid for it. So I mentioned earlier, Ejaaz: like right now we have an energy grid.

Ejaaz: There's a lot of constraint being put on there because humans need energy and so do AI data centers.

Ejaaz: So it tends to drive up the price of energy in the places that those AI data centers are set up.

Ejaaz: If you use something like Bloom Energy's gas turbines, you don't need to rely Ejaaz: on the energy grid at all.

Ejaaz: You just kind of set it up right next to your AI data center and hey, Ejaaz: presto, you now have energy at a cost-efficient price that you can now power Ejaaz: to train or inference any of your GPUs and your data centers.

Ejaaz: So Broadcom and companies like CoreWeave are going to need this.

Ejaaz: So hyperscalers in general, as well as AI labs. It kind of reminds me of the, Ejaaz: I don't know if you played Civilization ever, Josh. I feel like you did.

Ejaaz: It's kind of like moving infrastructure and power generation sources to your Ejaaz: little silo or settlement to kind of grow it. And that's exactly what's happening here.

Josh: Yeah, and I think like the obvious play is that there is absolutely no shortage of energy.

Josh: So the question is, who is able to produce the most of it? And they have this Josh: tremendously large backlog.

Josh: But I think the question is, can they actually create enough to start putting Josh: a dent into that backlog?

Josh: The manufacturing becomes the problem here. And with a lot of these plays, Josh: we're now moving into the world of atoms. Josh: We're now moving into the world where manufacturing actually matters.

Josh: And I would love to, we'll do another deep dive some other time to see if they're Josh: actually capable of manufacturing at scale.

Josh: But that's the biggest one. That's a 20 percenter. What else?

Josh: What other positions are noteworthy in this new portfolio?

Ejaaz: Well, he's added like, I think, $300 million worth of CoreWeave.

Josh: Can you explain CoreWeave? Why CoreWeave is so important here, Josh: please, for the people who aren't familiar?

Ejaaz: Okay, so if you think about it, if you're an AI lab, you need GPUs.

Ejaaz: But it's one thing buying the GPUs from a company like NVIDIA, Ejaaz: completely different beast, setting up those GPUs in rack servers, Ejaaz: getting the electrical supplies, getting the technical engineering and expertise Ejaaz: to maintain your GPU servers, the cooling systems, all that kind of stuff. So what you could do Ejaaz: is you could outsource it to a company that is known as like a NeoCloud.

Ejaaz: That's what CoreWeave is.

Ejaaz: They handle all of that for you. Broadcom kind of does something like this, Ejaaz: but CoreWeave was a smaller company that specialized in this, Ejaaz: particularly during the GPU gaming era and has now pivoted to AI specifically.

Ejaaz: Leopold got in or went in hard on CoreWeave. He added $500 million at the end Ejaaz: of Q3 in that episode that we covered back then.

Ejaaz: And he's added another $300 million here. So we're looking at what is potentially Ejaaz: an $800 million position in CoreWeave.

Ejaaz: Now, the story goes a little deeper.

Josh: And that's 700% increase over the quarter.

Ejaaz: Literally. But there's another layer to the story where he also owns around Ejaaz: 10% of a company called Core Scientific, which is CoreWeave's main supplier Ejaaz: to setting up energy grids.

Ejaaz: So if you think about bets made in investing, Ejaaz: Leopold's probably made the largest levered bet in core GPU infrastructure in Ejaaz: neoclouds like CoreWeave as well as energy supply like blooms these are his Ejaaz: two biggest positions that he currently holds in his fund right now Josh: And what i find interesting is he's beginning to own enough percentage of these Josh: companies to become an activist investor to actually influence the outcome of

Josh: the companies which i find fascinating and as i'm going through this i'm seeing Josh: i mean power generation is a clear one but the most positions that he's added Josh: in particular is around 29 yes.

Ejaaz: Which is exactly Josh: It's so fascinating like 10 new positions around real estate in general 800 Josh: and this gets to i I guess the Bitcoin mining play, because what we're seeing Josh: here is a lot of Bitcoin mining companies.

Josh: And I think this seems bizarre and a little wrong. It's like,

Josh: okay, well, crypto is not doing super hot. Bitcoin isn't doing well.

Josh: Why is he buying all of these Bitcoin mining companies? And it's because they Josh: own the two critical pieces of infrastructure required for AI buildouts.

Josh: They have the real estate and they have the power because I mean, Josh: what does Bitcoin mining require?

Josh: A tremendous amount of energy and a lot of space to put those GPU racks.

Josh: And now that Bitcoin mining is not on its way out, but there are better risk Josh: adjusted returns for that real estate, Josh: It seems as if he's betting on the idea that these Bitcoin mining companies Josh: are going to either sell their rights and their permits or just pivot to AI Josh: data centers in general.

Ejaaz: To be clear, he does not have any interest in mining crypto with these companies.

Ejaaz: He's buying them for their licenses.

Ejaaz: They have access to the electrical grid. Usually, these kinds of things take Ejaaz: months or years to attain.

Ejaaz: That's why, although you see all these major announcements from the likes of Ejaaz: Meta, Microsoft, and OpenAI saying, hey, we've got $1.4 trillion worth of compute Ejaaz: partnerships signed, but you don't see that translated into the models that Ejaaz: they're pushing out just yet.

Ejaaz: That's why GPUs being pushed out are always a generation behind.

Ejaaz: It's because they don't get access to this permitting.

Ejaaz: Leopold has sidestepped the entire thing and is buying up these smaller companies Ejaaz: that already have access to it.

Ejaaz: And so he's like gutting them completely of their crypto services and just repurposing Ejaaz: them for training AI models specifically and being that provider for them.

Ejaaz: It's kind of like if you take over a bar that already has a liquor license rather Ejaaz: than applying for a liquor license and waiting many years to get it.

Ejaaz: It's just a hack. It's really useful.

Josh: One of the things I've admired most, I think, about the thesis that Josh: he's had and just kind of watching it play out over the last year is how Josh: simple and yet effective it is it's like okay like Josh: i understand bitcoin mining and obviously they have permits and Josh: obviously they have energy and obviously every ai company wants this why would

Josh: everyone not be buying these things and i think the simplicity of these ideas Josh: is what has kept a lot of people away from investing but over and over it continues Josh: to be proven right and there's another um thesis that he had in that early paper Josh: that we mentioned that was 165 pages about some timelines particularly around Josh: agi which i thought was interesting because this guy seemingly right about everything is.

Ejaaz: He right about Josh: Agi by 2027 are we actually going to Josh: get that and in order to answer this prediction we have a polymarket open which Josh: is predicting whether open ai announces it has achieved agi before 2027 and Josh: i know the odds were against leopold when he raised this fund but like man these Josh: odds are at 13 so it seems like a stretch that he's actually going to be,

Josh: getting AGI in 2027 and maybe the investment thesis is right and the timelines Josh: are slightly wrong. I don't know. This seems like kind of insane.

Ejaaz: Yeah, it's like a it's a it's a small percentage chance. But I have to say he's Ejaaz: been he was originally criticized for his essay being too outlandish and inaccurate.

Ejaaz: A lot of some like 50% of people thought that it would be happening in the next Ejaaz: couple of months. A bunch of people said now this is going to happen until 2030.

Ejaaz: He's the only guy who's had the prediction that has been nailed so far.

Ejaaz: He called out GPUs before there was a gpu rush now he's calling out energy infrastructure Ejaaz: before there's an energy infrastructure rush so i think he's ahead of it here yeah Josh: If you believe he's right there is a lot to be made by pressing that yes button Josh: on polymarket and thank you polymarket for sponsoring this part of the show.

Ejaaz: But it's not only long positions um that he has he's also short um a position Ejaaz: and it's particularly on one company uh that company is infosys um infosys is Ejaaz: basically a company that specializes in IT outsourcing, particularly in India.

Ejaaz: And their business model is completely based on having cheaper labor than you Ejaaz: could get access to in Western countries like America or Europe, Ejaaz: or continents like Europe.

Ejaaz: So the point is, hey, just outsource all your admin IT stuff to us, and we got you.

Ejaaz: And the bet that I think he's seeing here is he's seen the rise of products Ejaaz: like Claude Code and GPT Codex 5.3.

Ejaaz: And he's realized, wow, these models are actually now good enough to automate Ejaaz: not just menial work, but really important IT processes.

Ejaaz: And he's taken out a massive short on this company.

Ejaaz: This to me is like one of his more intellectual bets.

Ejaaz: And it's more kind of current to the trends that we're seeing right now.

Ejaaz: So it's good to see him basically put his money where his mouth is.

Josh: It's so fascinating going through this and seeing the kind of PCs play out.

Josh: I'm going to have to add some personally. I mean, this may cause me to start Josh: diversifying a little bit.

Josh: And maybe, I mean, there has to be some issues with this, right? It's like,

Josh: going through the bull case, going through the bear case, what is there to criticize Josh: and be cautious of when you're getting into a portfolio like this?

Josh: And I mean, the first thing that comes to mind is that this is a 24 year old Josh: and not to just nothing against that because clearly it hasn't worked against Josh: him, but I'm not sure he's had, I mean, he certainly hasn't had the experience Josh: that a lot of these other investors have.

Josh: Is that an advantage clearly to some extent, but at Josh: what point does that advantage kind of crumble apart Josh: if so that seems to be like one of Josh: the other the things i'm concerned about the other thing i'm concerned about is Josh: that the fund is kind of a single thesis bet where if ai infrastructure and Josh: spending plateaus at all or the macro environment turns every position in this

Josh: portfolio correlates to the downside there's not much hedging against that so Josh: there is some potential for holes but nothing previously has signaled that this Josh: is going anywhere but up only.

Ejaaz: Yeah, I mean, if you look at some of the most famous investors of all time, Ejaaz: was never about the largest amount of money that they made in a single year or a single quarter.

Ejaaz: It's always just been about consistent returns year upon year, Ejaaz: decade upon decade that has compounded.

Ejaaz: Leopold has had an amazing start and he's beaten the above, he's above average Ejaaz: for any kind of hedge fund based in any sector versus just AI, Ejaaz: but he's yet to prove himself on a multi-decade kind of time span. So time will tell.

Ejaaz: All I will say is for someone who's got fired from OpenAI as an, Ejaaz: I believe he was an alignment researcher, but for someone who's had like major insight Ejaaz: and had the biggest or boldest prediction as to where AI is going, Ejaaz: he's been the only one to kind of nail it so far.

Ejaaz: So he's gone full conviction into his 165 page thesis, which I presume he put a lot of thought into.

Ejaaz: And it's paying off for him now. Now, will that change in the future? Maybe.

Ejaaz: But what you could treat these filings and these investments as is kind of like Ejaaz: a real-time tracker of where he sees the constraints in this AI race.

Ejaaz: And I want to emphasize this point for a second.

Ejaaz: Originally, his fun thesis was GPUs. People are going to need GPUs and people Ejaaz: are underpricing that opportunity.

Ejaaz: Now he's saying that opportunity is not overpriced, but it's market priced in.

Ejaaz: And now he sees the constraint pivoting or moving towards energy infrastructure.

Ejaaz: You've got the likes of Elon Musk that is launching data centers into space.

Ejaaz: Why? Because there's more energy in the sun.

Ejaaz: You've got everyone for the likes of Google, Meta, Broadcom, Ejaaz: NVIDIA. all of them are kind of investing in data centers or data infrastructure

Ejaaz: NVIDIA. all of them are kind of investing in data centers or data infrastructure Ejaaz: that gets access to these electrical grids.

Ejaaz: And he's just putting money where that demand is. And I think it's a smart move.

Josh: Yeah, I was, I read this great post by Naval the other day, I forget exactly what it said.

Josh: But the idea of it was that basically, software companies who only rely on software Josh: are going to have a very difficult time in the future, because it's so easy Josh: to actually create and generate custom software.

Josh: And I think what this pivot is reflective of, not only specifically around um Josh: building the architecture but just Josh: bets on the physical world and bets on actual manufacturing and bets on factories Josh: and bets on energy and infrastructure, things that can't be built using AI, Josh: things that actually need, Josh: human horsepower, like things that need to be built, things that need permits, Josh: things that need legislation.

Josh: This is like the hard physical energy and infrastructure required.

Josh: And I think that tracks to kind of where the future is going.

Josh: Energy is the one thing that no one could get enough of.

Josh: And I mean, that power generation play, the real estate play, Josh: it's all around one thing. It's just powering the future.

Josh: We saw through the last earnings season, $650 billion committed to CapEx from Josh: just a couple of companies like Google, Amazon, Nvidia, or not Nvidia, Josh: but whoever else is going to be paying Nvidia.

Josh: And I think it's a testament to just how much money is going to be thrown at solving this problem.

Josh: And this portfolio is ready to capture all of that upside.

Ejaaz: It's really pleasing to see someone make trades at the Ejaaz: right time in the right places um he has Ejaaz: made some what you would consider risky bets Ejaaz: like again not many people have heard about bloom energy unless you're like Ejaaz: deeply within the energy infrastructure place but they're kind of like a second Ejaaz: maybe considered first tier energy company um but specifically used for their

Ejaaz: portable energy so like he kind of put these two puzzle pieces together and Ejaaz: thought yeah electrical grids aren't going to support this so let me invest in this company.

Ejaaz: And he just goes in full conviction, right? We're talking about almost like Ejaaz: a fifth of his entire portfolio in this one position.

Ejaaz: So extremely concentrated, high risk, high conviction.

Ejaaz: But if it does pay off, that's what ends up in these kind of like 4.5 to 5x Ejaaz: returns from just a year and a half ago.

Josh: Man, and we just got to respect it, man. Like 1 billion to five and a half in a year.

Ejaaz: No, I'm not salty at all, Josh. I'm not salty at all that I'm older than him.

Josh: I will say my portfolio has not done as well as his. So perhaps we should be Josh: taking our own advice and start copy trading because like clearly this guy is Josh: seeing something with the clarity that we are lacking or at least the conviction Josh: that we have not been able to place in our actual trades.

Josh: But that is the update on Leopold's portfolio.

Josh: I mean, it's an amazing feat that he's managed to do and it seems directionally Josh: correct again like this new pivot to hardware to infrastructure to energy um Josh: super bullish i'm not sure there's really any other things to be said other Josh: than if you agree with the portfolio, Josh: I mean, not financial advice. This is just this dude's portfolio,

Josh: but it seems like it is promising and it is poised to do very well this year.

Josh: And yeah, that's the update on Leopold.

Ejaaz: Yeah, I'm curious what our listeners think. You guys have been extremely active Ejaaz: in comment sections on platforms like Spotify, Apple, as well as YouTube.

Ejaaz: Please keep the comments incoming.

Ejaaz: I'm curious whether you think our investment analysis here is professional grade, Ejaaz: Leopold Aschenenbrenner grade, or if you think we're completely incorrect and we're Ejaaz: missing an obvious story. No, you know what I want?

Josh: I want their number one top stock pick of the year.

Ejaaz: Yes actually yeah.

Josh: Like, Leopold's throwing it down on Bloom Energy. I want to know what is your Bloom Energy?

Josh: Like, what's the thing that we're missing that we need to know about that is Josh: going to 5X again this year? Yeah, that's how.

Ejaaz: Help Josh and I, like, make better portfolio returns in this 24-year-old kid. I would love that.

Josh: Yes, please. We're scrolling through the comments. Everyone wins if you pick Josh: a winner. So pick a winner, drop it in the comments, share it with your friends, Josh: along with this episode.

Josh: Subscribe to our Substack newsletter, which is coming out again, I think, Josh: the day you're listening to this um ejaz is writing the piece for this week Josh: it's very cool every friday we release a newsletter updating everything that Josh: happened this week and we are now doing a little more episodes possibly four Josh: episodes per week now so we're going to keep this train going thank you so much

Josh: for your support thank you so much always for sharing for giving us five star Josh: ratings and yeah we'll see you guys in the next episode.

Ejaaz: See you guys