Leopold Aschenbrenner's fund posted -67% loss in July after AI crash forced emergency deleveraging, though YTD remains +80% and he remains bullish on AI fundamentals.
Macro & Markets ·
Leopold Aschenbrenner's fund suffered a steep monthly decline in July after a sharp downturn in AI-related equities forced the portfolio to unwind its leverage and short positions through an emergency block trade. The fund posted a -67% loss for the month as the long and short holdings moved against the position simultaneously. Despite the monthly reversal, year-to-date performance remains substantially positive at +80%.
In his letter to investors, Aschenbrenner acknowledged the drawdown while maintaining conviction in the fund's strategic direction. The hybrid public-private structure remains intact and is now fully capitalized. The deleveraging action was taken to safeguard capital during the turbulent period, with all leverage and short exposure removed.
The fund manager's outlook on artificial intelligence fundamentals has not shifted despite July's losses. He contends that the underlying opportunity in AI has strengthened, suggesting the monthly decline reflects market timing and volatility rather than a change in conviction about the sector's long-term trajectory. How the fund repositions going forward and whether leverage will be reinstated remain open questions.