Ex-OpenAI Researcher’s Hedge Fund Is Betting Against Nvidia, Oracle And …

Artificial intelligence has been one of the key drivers of the stock market in recent years, with experts maintaining a bullish outlook on Nvidia ahead of its much anticipated quarterly earnings report. A former OpenAI researcher's hedge fund, though, has put a bearish spin on where the stock market's biggest companies may be headed.

Leopold Aschenbrenner, who went viral in 2024 for his paper "Situational Awareness: The Decade Ahead” that highlighted key concerns about the progress of AI, is betting against some of the biggest AI chipmakers, while investing in some other areas of the AI infrastructure trade, as per Business Insider.

Aschenbrenner's hedge fund, Situational Awareness, bought over $1.5 billion worth of put options on Nvidia, its latest 13F filing revealed. It purchased over $2 billion of puts on the VanEck Semiconductor ETF as well. Puts means that an investor bets that the value of a stock or ETF will fall, while call options predict that a stock could rise. 

Apart from Nvidia, the fund has bought over $1 billion of puts on software giant Oracle. It also purchased $535.1 million of puts on the Taiwan Semiconductor Manufacturing Co and roughly $159 million worth of puts on Intel.

Aschenbrenner earlier alleged that OpenAI was not taking security of its most sensitive AI research seriously enough and warned that the information could fall into the hands of countries like China, a claim the company denied, as per The Street.

However, his fund has remained bullish on a few other chip makers, as well as infrastructure firms like CoreWeave. Situational Awareness bought call options worth $388.8 million on SanDisk. It also purchased $55.3 million worth of call options on Bloom Energy and $140.6 million worth of call options on CoreWeave.

Investors Betting Against AI?

Aschenbrenner is not the only person warning against an AI bust. Earlier, investor Michael Burry, best known for predicting the US housing market crash, has widely been bearish on Ai stocks.

Earlier this month, the investor warned that the stock market's fixation on AI is starting to resemble the last stages of the dot-com bubble, CNBC reported. Warning that stocks are “not up or down” due to investor sentiment or jobs, Burry wrote on his substack, “They are going straight up because they have been going straight up. On a two letter thesis that everyone thinks they understand. ... Feeling like the last months of the 1999-2000 bubble.”

Short seller Culper Research recently published a short report on Nvidia, pointing out a potential for shares to drop amid problems in China.