3x Leverage Wipeout: Inside Leopold Fund's Forced AI Stock Liquidation
PTrubey · x · 2026-08-01
This deep dive provides a post-mortem on how Leopold Aschenbrenner's fund was forced into a massive liquidation due to high leverage and margin calls.
- High Leverage Risk: The fund operated with roughly 3:1 leverage, holding about $40B in equity and borrowing $80B to control $120B in public equities, heavily concentrated in volatile AI stocks.
- The Trigger: When stocks dropped 25%, the portfolio's value fell to $90B, dangerously close to the $80B loan threshold. Unable to raise sufficient cash quickly, the four major lender banks (Goldman Sachs, JPMorgan, etc.) seized control of the public portfolio.
- Citadel's Bailout: To prevent a market meltdown from panic-selling $80B in AI stocks, Citadel stepped in to buy substantially all of the holdings before the market opened.
- The Aftermath: Leopold retained some public assets and his $3.5B stake in Anthropic. The fund stayed solvent and remains profitable year-to-date.
Related event: Ex-OpenAI Staffer's AI Hedge Fund Blows Up, Citadel Takes Over $16B(41 posts)→
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