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Leopold Aschenbrenner launched Situational Awareness in 2024 with about 225 million dollars, backed by Jane Street, the Stripe founders, Nat Friedman, and Daniel Gross.

By the start of July, it held $45 billion. That is roughly a 200x increase in assets in under two years, with a 439% net return in the first half of this year alone.

Then this past week, his 4x leverage met a 30% - 47% drop in big AI infrastructure names, and the resulting margin calls forced him to hand his entire public book to Ken Griffin’s Citadel at a discount.

$45 billion down to about 10 billion in 30 days.

Markets act irrationally, but they do follow patterns. The hype cycle patterns have been swinging hard up and down since ~2015, and the Robinhoodification and the social mediafication of finance.

What it looks like is this: anytime you have a new hype cycle making huge gains in a short period of time, you know a correction is coming.

You don’t know when, but you know that, given enough time, it will come.

Sure, the AI boom is different. It’s the next industrial revolution, but the growing process still requires ups and downs. That’s the market figuring things out. It’s all part of the monetization growth process that every market undergoes.

You have to be really careful with leverage. In most cases, don’t trade with leverage, or trade with very minimal leverage, or use leverage, but always have 100% cover stowed away somewhere so you don’t get force liquidated (margin called) and forced to sell at a huge discount.

AI REGULATION - just like Bitcoin

AI is math. These are algorithms. 1s and 0s.

All this talk of banning or regulating or “safety” related to AI is the state doing what it does best: fk things up by messing with them. And it's the same crap we went through with Bitcoin, where they talked about regulating it, banning it. blabla.

Here’s how it works with new technolgoy in this age: A country that regulates or bans a new technolgoy just pushes it to another country. That new country wins because of less competition and an influx of talent and capital, while the country that banned it does not benefit... and in fact… gets further behind in the technological and economic arms race.

Smart.

This is one of those things that modern politicians, the media, and these people don’t understand, and many of these institutions are still run by people who grew up before smartphones, before the internet. They’re locked into the old ways of doing things.

Decentralization, which the internet and then Bitcoin allowed, is a really hard concept to grasp, but the foundational benefit it provides humanity reduces the power of the incumbents in control. It spreads the power out to more individuals. It gives people more information, more control, and less susceptibility to control.

And AI is just the newest iteration of this spreading-out phenomenon.

Anytime you can do something to take power away from the few that try to control and manipulate while benefiting themselves at the expense of others, I am all for it.

Decentralization is something most politicians and the mainstream media don’t understand—because understanding it is ot admit it hurts them. And since most power-centered institutions are still run by these individuals who grew up before smartphones, before the internet, they’re locked into the old ways of doing things.

From a game theory perspective, you have to embrace these technologies or you lose. AI right now, and this new story of control, regulation, safety, blah blah blah, all the same bullshit EVERY NEW TECHNOLGOY faces because humans are fear-based creatures that dissipate their fear by doing things (which is an illusion). It was the same thing for Bitcoin early on: Many countries banned it while the United States realized that embracing it was a better strategy. So they sought to provide regulatory clarity so that entrepreneurs and the market could thrive, fostering innovation and keeping the benefits accruing to the nation instead of putting it offshore.

China banned bitcoin mining in September 2021, and its share of global hashrate fell from roughly 75% to near zero in weeks. It did not kill Bitcoin. It just moved hashrate (which is just servers) to other places like Texas. The US went from about 17% of hashrate in 2020 to 37.5% by early 2026. And Chinese miners are estimated to be back near 55% today even after it.

Meanwhile, the White House sat down with OpenAI, Anthropic, and Google yesterday to talk about a safety framework that is explicitly voluntary and opt-in.

This is the way.

-Colin
X-IG-TT → One Good Watch (still under construction, so plz excuse the errors. Lots of watches available and more on the way.)

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📰 Links

🛠️ One Build — The Concentration Map

List every place you are leveraged. Not just margin. Debt, the one client who is most of your revenue, the one platform sending all your traffic, the one model your whole workflow runs on.
Next to each, write the actual number. Percent of revenue, percent of traffic, dollars owed.
Circle anything over 40%. That is not a business line; that is a single point of failure wearing a business line's clothes.
Take the biggest one and write the cover: what you do in the first 48 hours if it goes to zero tomorrow. Real steps, real numbers, not vibes.
Spend the next month pulling that number down by 10 points. One number. One month. Then do the next one.

📈 Markets

🤖 AI

🟢 NVDA +2.9%. Chips went along for the ride even though software led the day. Take: it went up and nobody cheered, which is what a maturing trade looks like.
🟢 BABA. Popped on the Qwen 3.8-Max launch. Take: China is shipping frontier models on a faster clock than the narrative admits.
🔴 No honest AI decliner Monday. The complex closed green across the board, so I am not inventing a red line to fill the grid.

💻 Tech

🟢 AMZN +15.3%. Q2 EPS of 1.88 against 1.83 expected, sales of 200.6 billion dollars, new all-time high. Take: the boring cash machine outran every AI pure-play on the day.
🟢 SNDK +6%. Memory kept ripping. Take: the pick-and-shovel trade is still the cleanest way to own this.
🔴 SPCX. Sagged into insider lock-up expirations that start August 6. Take: new supply is new supply, no matter how good the story is.

🏦 Finance

🟢 The whole tape. S&P +1.42%, Nasdaq 100 +1.76%, Dow +1.32%, Russell +1.72%. Take: everything green together is relief, not conviction.
🔴 Crude. Retreated after Trump called off the Iran strike and the US and Japan announced a joint intervention to lift the yen. Take: geopolitics still prices oil faster than supply does.

🌎 Other

🟢 ETN +7.3%. Eaton ran on data center electrical demand. Take: the AI trade keeps leaking into companies that look nothing like AI.
🔴 PLOW. Q2 revenue up 10% to 214.6 million dollars but short of the 219.5 million estimate, net income down to 25.4 million. Take: growth that misses is still a miss.

Monday was one of those days where almost everything went up at once. That tells you more about positioning than about any of these businesses. Which is the whole point of the second half of today's letter.

🐦 Tweet

https://x.com/colinstuckert

📊 Stats

355 million dollars. The opening weekend for Spider-Man: Brand New Day, the second-largest debut in box office history, 2 million behind Endgame. Source: Variety
8.7 percent. The year-over-year drop in fresh lettuce unit sales after the cyclospora outbreak, roughly 7.6 million pounds. Source: The Wall Street Journal
1 trillion dollars. The art Boomers are about to hand down, with an estimated 1,000 collectors each holding a billion dollars or more. Source: Bloomberg

🔥 Useful Sh!t Corner 🔥

🗓️ On this day in 1914 → Britain declared war on Germany and the First World War went global.
🦾 How to be dangerous → Move your best prompt out of the chat app and into a plain text file you own. Vendors change. Your files don't.
🌞 Health → Get sunlight in your eyes within 30 minutes of waking. Costs nothing, sets the whole night's sleep.
🍳 Cooking → Salt your meat and leave it uncovered in the fridge overnight. Dry brine beats wet brine every time.
💬 Quote → "The market can remain irrational longer than you can remain solvent." —John Maynard Keynes
🤖 AI reality check → A model that writes your code still cannot tell you whether the business should exist.

🧰 Tools

🤖 While everyone’s watching tutorials, the winners are installing systems like this: My AI Agent Operating System → full memory, setup, and database needed to get an agent working for you in minutes. Get the basics down, then customize it for your exact work and life routine → Only $76 → Personal AI Agent System: A Work + Life OS

👓 Starting at screens for hours each day started giving me headaches and blurry vision at night. Blue light-induced eye strain was the culprit. And it’s why I now wear these daily: LITEZ Screen Glasses. BH readers get 10% off using code BHNL

🛠️ The tools I actually run my business on → My Apps Stack (click here)

🛍️ Fav Products

🪴 Better Human Goods → Nontoxic essentials for health and home. Products that work without the junk. Use code BNL for 10% off.

🛒 My favorite products, with subscriber discounts → My Favorite Products

👋 I’m Colin → Father, AI builder, founder, investor. X-IG-TT → Free Stuff

🧠 Become irreplaceable: Build Your Personal AI Moat. Get 50% off the year and support so I can keep dropping free stuff here and here.

Use AI. Stay Human. This is the way.

🦾 Up 200x Then Wiped Out