Limitless: An AI Podcast

Josh:
I can't believe we're filming this episode. The poster child of Silicon Valley

Josh:
investing, Leopold Aschenbrenner, has kind of been dethroned.

Josh:
Like the dude got wrecked.

Josh:
As to set some context, 20 days ago, there's this kid in mid-20s,

Josh:
Leopold Aschenbrenner, we filmed many episodes about him. He was running the

Josh:
best performing hedge fund on earth. It was up 1,600%. He ran it up from a few

Josh:
hundred million dollars to $45 billion.

Josh:
And then the market learned two things. One, that he was on leverage and two,

Josh:
that he was getting closer to his liquidation prices.

Josh:
So what does the market do? It hunted those positions and got him liquidated

Josh:
only for one man to come in and swoop up the entire position of his fund in

Josh:
one single transaction. And now, as I understand it, Ejaz, every single one

Josh:
of his public positions is closed.

Ejaaz:
It's gone. That's it. It is gone. It's gone.

Josh:
Overnight, it happened so fast. This is unbelievable.

Ejaaz:
Yeah. And I think it's important to kind of like set some context.

Ejaaz:
Who on earth is this guy and like how all of this unravel? We're going to get

Ejaaz:
into all of that on this show. But on your point of leverage,

Ejaaz:
Josh, like it wasn't just like any amount of leverage. This guy was 4X levered on the entire font.

Ejaaz:
4X is crazy. So the nominal value that he was levered at was $100 billion.

Ejaaz:
Do you know how much money you need to borrow to be levered to $100 billion

Ejaaz:
on like a $45 billion book? It is just absolutely insane.

Josh:
A lot more than it should have been.

Ejaaz:
Way more, way more than he should have been. Okay, so who on earth is Leopold

Ejaaz:
Ashenbrand? I'm sure you've heard this name, but just a brief kind of recap.

Ejaaz:
Leopold Ashenbrenner was the wee age of 23 years old, so this was two years

Ejaaz:
ago in 2024, when he left or rather got fired from OpenAI on the Super Alignment AI research team.

Ejaaz:
And he decided to write a 165-page essay on what he thought the next decade

Ejaaz:
of AI is going to look like.

Ejaaz:
And turns out he's the only guy that was bang on with every single one of his predictions.

Ejaaz:
And people love the essay so much that he raised a fund, a small amount of around $225 million.

Ejaaz:
And over the course of two years, he rode that up 1,600% to the tune of $45 billion.

Ejaaz:
Now, it is one of the most impressive runs of any investor.

Ejaaz:
But the fact that he did it at the age that he had with no, zero trading experience,

Ejaaz:
by the way, is just phenomenal.

Ejaaz:
And the fund was based on two main pieces. Number one, that the physical AI

Ejaaz:
infrastructure was going to be one of the best investment opportunities out

Ejaaz:
there. Compute, GPUs, memory, all those kinds of things.

Ejaaz:
He was very early on the trade. He called the trend very early. The second thesis is,

Ejaaz:
applications, software, he was going to be short. He didn't believe that companies

Ejaaz:
like Microsoft or whatever, their software was going to be worth anything in

Ejaaz:
a world where AI models can just absorb all of those things. That was the sure bet.

Ejaaz:
But things started to unwind around six weeks ago when his thesis that held

Ejaaz:
strong for two years started to waver. Markets started to recede.

Ejaaz:
There was the global war that was happening. There was a few kind of like oversupplies

Ejaaz:
happening in terms of funding.

Ejaaz:
And things started to go a little wry.

Josh:
Yeah, it was it was messy. I'd say it took about 20 days to go from like absolute

Josh:
legend to fully liquidated. It was like this happened very rapidly.

Josh:
And it was kind of marked in a way by that July 10th ringing of the bell of SK Hynix.

Josh:
This was like this huge IPO moment where everyone was very excited.

Josh:
And it very much marked that top tick in terms of where the market was for Leopold in particular.

Josh:
So that was early July. You can think like July 10th is when it started.

Josh:
We're now sitting here August 3rd recording this. You'll be listening to this August 4th.

Josh:
In this month, a lot kind of happened. And it starts with the memory trade.

Josh:
We know Leopold is very risk-on with the memory trade, so much so that he was

Josh:
using, like you mentioned, four times leverage.

Josh:
And just a brief explainer for those who don't understand leverage.

Josh:
At four times leverage, a roughly 17% move against your portfolio erases about

Josh:
two-thirds of the equity.

Josh:
So for every $1 you put down of money, you borrow three more.

Ejaaz:
You control $4 of stock. If you're down like 25%, I think he wipes the entire

Ejaaz:
book. Like you're done. It's just a 25% move.

Josh:
Exactly, 25%. But the problem with this is that the people who are loaning you

Josh:
money don't want to lose the book.

Josh:
So they're going to start to claw back that equity prior to it reaching zero.

Josh:
And that's when you see this cascading liquidation of events. And this was caused...

Josh:
Initially by the market sell-off in memory and then it just went a little bit

Josh:
further and faster from there uh you'll notice that there was this entity that

Josh:
goes by the name of citadel that did flag earlier in the week

Josh:
that hey we think interest rates might actually increase

Josh:
and what does that mean for the market it adds further selling pressure so there was all this pressure

Josh:
downward on his positions and because he was leveraged it creates a lot more

Josh:
pressure on those positions and it required him to raise more money so in early

Josh:
july around this time there were rumors that Leopold was looking to raise a

Josh:
little bit more money for the fund.

Josh:
I'm not sure if he actually got there, but basically July 24th comes,

Josh:
he writes a letter to his investors admitting the damage.

Josh:
Word gets out that he has been damaged. Those rivals press his known positions.

Josh:
The brokers that he loaned his money from, they want cash. And then by July 30th,

Josh:
the whole book sells in one single block and he's fully out of the market and

Josh:
that's what happens and it was really this like unbelievably devastating thing

Josh:
i would imagine for the fund

Josh:
um because it just happened seemingly out of nowhere and everyone went from

Josh:
like oh my god this guy's a genius to oh my god wait he just lost all of his

Josh:
money well perhaps not all of it but a lot of the portfolio got wiped out.

Ejaaz:
Absolutely josh um i feel like this timeline could play in a movie like the

Ejaaz:
social network or something like that so i'm gonna spend crazier

Josh:
It is nuts.

Ejaaz:
Like I saw this entire thing unravel on my timeline, right, in real time.

Ejaaz:
And so I'm going to share some of the tweets that kind of, I'm going to take

Ejaaz:
you guys through this journey and run you guys through this entire timeline.

Ejaaz:
So the original tweet that went viral was news broken from the Financial Times.

Ejaaz:
And the title is a little demeaning. It's Leopold Ashenbrenner's situational

Ejaaz:
awareness seeks to raise capital after the AI route. Now, that was the,

Ejaaz:
I think it was the start of July that you just referenced, Josh,

Ejaaz:
where it was like, okay, things are getting a little weird.

Ejaaz:
And I watched the Martin Shkreli interview on TBPN.

Ejaaz:
And he basically said he got approached by someone like a random intermediary

Ejaaz:
saying, hey, do you want to buy $100 million of Anthropic shares at a really steep discount?

Ejaaz:
And he just kind of like sat back in his chair and he was like,

Ejaaz:
is this Leopold? Because there's no other fund out there that would,

Ejaaz:
you know, do this in their right mind.

Ejaaz:
And then from Martin Shkreli himself, he goes, I have a hearing rumors that

Ejaaz:
SALP, which is Situational Awareness LP fund, is down more than 50% month to date.

Ejaaz:
After it was being up around 200%. Now, the reality is even worse.

Ejaaz:
It was down more. It was down 67% according to Leopold's letter at that time,

Ejaaz:
but it wasn't publicly released back then.

Ejaaz:
And the sad news is month over month, or rather year to date,

Ejaaz:
he was up 440%. So like, you know, all of this came kind of like after the fact.

Ejaaz:
So we're kind of like seeing a lot of these like news bits break,

Ejaaz:
like people are like, okay, do I think that this like fund maybe potentially broke off.

Ejaaz:
And then the news came that you just referenced, Josh, which is Leopold sold

Ejaaz:
his entire public equity book that was levered to this man called Ken Griffin.

Ejaaz:
Ken Griffin is CEO of Citadel. Now Citadel, they've been in this game for a

Ejaaz:
while. They are market makers. They're one of the biggest market makers in the world.

Ejaaz:
And they are known for managing risk expertly, such that they give compounded,

Ejaaz:
very heightened gains every single year.

Ejaaz:
And Citadel was the one that Situational Wellness or Leopold approached when

Ejaaz:
they were in this time of need, when their leverage was working against them

Ejaaz:
and said, Ken, I need to save this fund. I need you to help me out of this very sticky position.

Ejaaz:
So Ken's team worked with him for six hours into the early hours of the morning

Ejaaz:
before market open on Monday last week and said, okay, you can sell me this

Ejaaz:
book at 40 to 80 on the dollar.

Ejaaz:
And Leopold agreed. Monday market open.

Ejaaz:
Remember that relief rally? Did you see those stocks? Did you see those stocks?

Ejaaz:
There was a lot of green. It was nice to see a lot of green.

Josh:
They were up like 20% apiece.

Ejaaz:
Insane. So the memory stocks that had been beaten down over the last month were up like 20 to 25%.

Ejaaz:
Guess how much Ken made in a couple of hours just by buying Leo's book?

Josh:
Many billions of dollars.

Ejaaz:
Yes. He made four to six billion dollars. That's unbelievable.

Ejaaz:
Rumors that were stated are true. So a very interesting thing.

Ejaaz:
But Ken, of course, he's a pro at this game. and he was already working against

Ejaaz:
Leo before this happened.

Ejaaz:
If you remember that Ken was pushing for interest rates to get like even worse,

Ejaaz:
even though he probably knew what the outcome was, just to stoke fear in the

Ejaaz:
market and dump the markets even more.

Ejaaz:
So people became aware that Leopold's fund was in trouble because of the recent decline.

Ejaaz:
And like you said earlier, they all piled in. They basically all wanted to short

Ejaaz:
the position, push the stock down even more so that they can liquidate the guy

Ejaaz:
and get it at a better price. And that's exactly what Ken Griffin did.

Josh:
This is like an episode of Billions, if anyone's watched the show.

Josh:
Like Bobby Axelrod is Ken Griffin. And you saw this predatory selling happening in real time.

Josh:
And that's when the market knows that there's this giant fund wounded.

Josh:
And it also knows the positions.

Josh:
If you realize, I mean, every single quarter, we talk about the 13F filing.

Josh:
That shows the positions of the fund. It knows whether to sell or short.

Josh:
Those names and then force it out and then buy it back cheaper.

Josh:
So people were able to actually target specifically the positions that Leopold

Josh:
held in order to push those liquidation rates down higher, down faster,

Josh:
and force him to sell all this thing.

Josh:
And then the lenders call. I know his prime brokers, who are the people that lend him all the money.

Josh:
These are companies that you know, like Bank of America, Goldman Sachs, JP Morgan.

Josh:
They call him up and they say, hey, those stocks that we loaned you,

Josh:
they're down a lot. We're going to need that money back right now. So he has to sell it.

Josh:
And on top of that, the rate hike thing is so funny because you have to imagine

Josh:
Citadel is playing this game.

Josh:
They were targeting the positions that Leopold had to sell them, to push the price down.

Josh:
And then adding the rumor on that these interest rates are going to be increasing,

Josh:
that crushes the market even more. It's like, oh man, that's so brutal.

Josh:
Only to buy it back at the absolute bottom and run it up from what?

Josh:
He made it up like five, six, seven billion dollars in a single day.

Josh:
So I'd love to hear the behind the scenes of how all this happened.

Josh:
I think that's probably really funny.

Josh:
But if we look at this book before and after now, we can kind of digest the

Josh:
carnage and see where he stands now. Like what is the situation awareness fund look like?

Josh:
Well, it turns out that almost all the public positions were gone.

Josh:
There still seems to be a few small ones, but the main survivor is the anthropic shares.

Josh:
Funny enough, it sounds like they still have about five billion dollars in Anthropic

Josh:
shares. So now the Situational Awareness Fund has become a holding company for Anthropic.

Ejaaz:
Is that right? Is this a venture fund? It's a venture fund right now.

Ejaaz:
Martin Shkreli had this crazy take on CBPN where he basically goes,

Ejaaz:
yeah, when you see a hedge fund starting to invest in VC deals, it is the death knell.

Ejaaz:
And literally a month later, like Leopold's fund like blows up.

Ejaaz:
But yeah, to kind of give you the state of the situation right now for Leopold.

Ejaaz:
His public book is pretty much entirely erased. He has a few positions open,

Ejaaz:
and they're completely unlevered, and they're going to be unlevered for the foreseeable future.

Ejaaz:
So it's spot only, long only. And then, yeah, the Anthropic shares is actually

Ejaaz:
what ended up saving the fund.

Ejaaz:
So this is a unique twist. And I'm going to show you, actually,

Ejaaz:
from the horse's mouth himself, Leopold Aschenbrenner's letter that he shared with his investors.

Ejaaz:
I'll give you the summary of what he says in this letter. Basically,

Ejaaz:
he said, we had an extenuatingly bad month and we let you guys down and it is

Ejaaz:
completely my fault. So in a month, the fund drew down 67%.

Ejaaz:
However, year to date, the fund is still up 80%.

Ejaaz:
So I just want to repeat that for a second.

Ejaaz:
The fund drew down massively, 67%.

Ejaaz:
Was still reported an 80% gain year to date.

Ejaaz:
The only sole reason why they were able to report that is because of this little baby right here.

Ejaaz:
Oh boy. And his anthropic investment. Poster child. Correct.

Ejaaz:
So he sold a huge amount of anthropic shares and he got in super early.

Ejaaz:
I think it was in their series eight rounds. So when the company was valued

Ejaaz:
at $60 billion and they're now like, I mean, if you believe some of the secondary

Ejaaz:
markets worth like $1.2 trillion or something like that.

Ejaaz:
So he made a huge bab on that And he used that to basically quell the huge public

Ejaaz:
market loss in that. And in this letter, he basically admits to his fault.

Ejaaz:
But he says that these are extremely expensive scars that he needs to learn from.

Ejaaz:
And the most important thing is he gets to live another day.

Ejaaz:
Now, if you want to understand, you know, which investors are kind of okay with

Ejaaz:
this and which investors might be bad, the early investors are probably okay

Ejaaz:
with this. Definitely hurt. They're licking their wounds. But they're like,

Ejaaz:
okay, I saw Leopold run this up.

Ejaaz:
His thesis is still intact. So let's see what he can do.

Ejaaz:
But if you were part of that capital call, which you mentioned earlier,

Ejaaz:
Josh, which was like just before all of this was going bad when he was reporting

Ejaaz:
like, hey, we're up 440% and we're taking on more capital, right?

Ejaaz:
Because the markets were starting to draw down.

Ejaaz:
If you put money at that point, so that was like a month and a week ago,

Ejaaz:
You're gone. Like your entire LP share is erased. So that's what's not being

Ejaaz:
spoken about publicly. And I just wanted to kind of like lay that out.

Ejaaz:
It has been a brutal turn of events. And the worst part is

Ejaaz:
He had his wedding this past weekend. So he was going into his wedding whilst

Ejaaz:
all of this was happening.

Josh:
That sounds like an absolute name. I really feel for the guy.

Josh:
This has got to be such a tough learning experience.

Josh:
But I mean, in a way, like you made it to the big leagues. Like he ran up this

Josh:
fund from a couple hundred million dollars to 45 billion.

Josh:
And now you're going to have to fight with the big dogs.

Josh:
And Ken Griffin has done this before. He did this. What was the oil company?

Josh:
Enron, I think it was. That went out of business.

Josh:
It was unbelievable. So Ken Griffin is actually worth highlighting here in the

Josh:
story because he is, I mean, a remarkable bailout investor in a way.

Josh:
Ken Griffin is the type of guy that will never get a phone call,

Josh:
but perhaps like once every five to 10 years, he'll get the phone call and it

Josh:
will make him tens of billions of dollars every single time.

Josh:
He's the guy that you could call to bail them out.

Josh:
If anything goes wrong, if you are on the edge of bankruptcy,

Josh:
you call up Ken, he'll send his guys over and he'll take care of it.

Josh:
I know with that Enron story, at least I remember the story because it was so

Josh:
amazing how he took a bunch of his top investment guys, put them

Josh:
on a plane and flew them over to go actually be at the office and work overnight

Josh:
to process all the books to see where the value was in the business and what

Josh:
he discovered is that a lot of the value was in.

Josh:
A few key people that were kind of managing the infrastructure that truly understood the business.

Josh:
So he extracted those people. He started his own thing with them.

Josh:
And then the rest of the company was kind of sold off to someone else.

Josh:
And it was having a really tough

Josh:
time. It didn't do well. But Ken and the team, I mean, what does it say?

Josh:
The team built Citadel's commodity trading and made 30 plus billion dollars

Josh:
so far where the UBS who bought Enron, they had to shut down Enron,

Josh:
which was the business that it bought.

Josh:
So Ken Griffin has done this before. He is the guy that you call leopold called

Josh:
him it seems like he's always kind of at the center of some sort of you know

Josh:
interesting cultural moment i remember the last one for for the people who were

Josh:
involved in crypto it was the um,

Josh:
oh what was this it was like the nash gamestop not game it was gamestop partially

Josh:
and then there's the other the constitution.

Ejaaz:
That's oh the constitution yeah yeah

Josh:
Yeah see he's part of so many things all these cultural moments it's like okay

Josh:
the gamestop moment he was in the constitution he was in like when people were

Josh:
buying the constitution it's just like ken griffin is always there lurking in

Josh:
the shadows and capitalizing on this.

Ejaaz:
So i think that comes in i think when it's like always disastrous right like

Ejaaz:
like i love that it's like yeah it's like the the game stop thing when

Ejaaz:
capital was getting squeezed he was like all right i'll i'll bail you out for

Ejaaz:
10 billion dollars but like i think he got

Ejaaz:
recurring percentage of their revenue from that fund for the immediate future

Ejaaz:
and like for the long foreseeable future as well so he just like had passive

Ejaaz:
income coming from this like billion dollar plus fund and then the other one

Ejaaz:
I think I remember was the Amaranth thing.

Ejaaz:
This was before my time. I think I was like a little baby, but I read up about

Ejaaz:
this. And it's this guy, almost Leopold-esque.

Ejaaz:
And he was trading gas futures, Josh. And he made like a similar return back then.

Ejaaz:
And then he flew too close to the sun, blew up and sold his entire book to Ken

Ejaaz:
Griffin. So actually, I think Ken has made the most money from these disaster

Ejaaz:
situations. Just a shock.

Josh:
Yeah, he's top dog. I mean, people are going to quickly learn when you get to

Josh:
that size. Like you're going to have to deal with the big boys.

Josh:
You're getting calls from J.V. Morgan. You're getting bought out by Citadel.

Josh:
I mean, this is the reason why these behemoths that exist today.

Josh:
Was leopold wrong or did he just get wrecked.

Ejaaz:
Look at this chart josh you tell me look at this chart and you tell me that's so brutal

Josh:
Okay so upon liquidating his entire position,

Josh:
all of his holdings were up an unbelievable amount this is one day right this

Josh:
is one day nebius one of his largest holdings up 27 percent iron

Josh:
up 26 and a half percent bloom energy which we filmed an entire episode on up

Josh:
25 percent in a single day even sk heinic.

Ejaaz:
But i mean even the salt to wound that closed out into this

Josh:
By midday. It came up 16%. So his entire portfolio absolutely ripped, which signals to me.

Josh:
And I mean, based on everything that we've been saying too, I mean,

Josh:
the day before this happened, we filmed an episode saying the market's wrong

Josh:
because we were watching the sell-off and we were trying to make sense of why

Josh:
the market was selling these things off so dramatically. And I think now we

Josh:
kind of have an answer. People were hunting Leopold's positions.

Josh:
As soon as he got liquidated, as soon as those positions closed,

Josh:
the entire market ripped. And I think it's a testament to.

Josh:
To leopold in the fact that he was right it's just he was right with leverage and unfortunately

Josh:
with leverage you are never truly secure you are never truly safe even if you're

Josh:
right if you're right in the wrong way it's just as equal to being wrong and

Josh:
that's kind of where he fell here but i think

Josh:
directionally he is right and now we have to re-evaluate this question like

Josh:
hey is this a good time to actually deploy money into these companies because

Josh:
look they're doing well we just saw all the earnings reports from companies like google whose

Josh:
cloud margin revenue is going through the roof their capex is going through

Josh:
the roof they're so much that their cash flow negative for the first time in

Josh:
company history so all these large cap companies are spending,

Josh:
huge amounts of money we know where that's going it's going to land power shell

Josh:
it's going to the chips it's going to the memory it's going to all the infrastructure

Josh:
required to build these tokens and who are the people that are responsible for

Josh:
this well we're looking at the list on screen right now so it seems like

Josh:
leopold is right he's probably going to try to run this back as best he can i'm sure,

Josh:
people shouldn't lose too much trust in him i mean that's like a touchy thing to say but

Josh:
he wasn't wrong he was only wrong in terms of how he went about it hopefully

Josh:
this is the learning experience and as we move forward the thesis still stands

Josh:
and it can kind of continue along this journey of being that like,

Josh:
poster child for the ai investment trade.

Ejaaz:
Yeah. I want to give the other side of the coin here, which is like,

Ejaaz:
what if Leopold is wrong?

Ejaaz:
And there is a convincing enough argument that he might be. And this is not

Ejaaz:
something I prescribe to, but I

Ejaaz:
want to give that for the bears that are watching this show, right? Okay.

Ejaaz:
So if you remember earlier in this episode, I said his thesis were two parts.

Ejaaz:
One, that AI physical infrastructure was going to keep going up because the

Ejaaz:
demand is way higher than anyone can conceivably think of.

Ejaaz:
And number two, that he was going to be short software applications because

Ejaaz:
AI model companies or labs like Anthropic and OpenAir are just going to absorb

Ejaaz:
them, right? They're just going to get the model to train and do the thing that

Ejaaz:
Microsoft's application can do, and then just replace Microsoft, right?

Ejaaz:
But like you just said, Microsoft just had their earnings report,

Ejaaz:
and it is the best that they've had.

Ejaaz:
It's a record earnings investment for goodness knows how long at this point.

Ejaaz:
And that's been a continuing trend across most software applications that Leopold

Ejaaz:
was actually short in his most recent 13F findings, cybersecurity stocks,

Ejaaz:
and a number of other ones, they are actually all up over the last couple of months.

Ejaaz:
You know what hasn't been up over the last month, up until maybe like market

Ejaaz:
open of like last week? It's these memory stocks, man.

Ejaaz:
It's the AI physical infrastructure. NVIDIA actually is up 0.33% over the last month and a half.

Ejaaz:
So like, there's a lot of things that are going on here that could potentially

Ejaaz:
hint that Leopold's thesis is wrong that being said i don't think that that is correct personally

Ejaaz:
purely because of all the demand that the likes of microsoft amazon hyperscalers

Ejaaz:
are seeing on the cloud service side of things that's going to drive more memory

Ejaaz:
demand it's going to drive more gpu sales from

Ejaaz:
nvidia from amd it's going to drive more cpu sales from intel and the infrastructure

Ejaaz:
play is very much still there now the question is

Ejaaz:
is it already priced in? And that honestly is something that I can't answer

Ejaaz:
because I don't know what people have invested in or like how much of their

Ejaaz:
money they've invested.

Ejaaz:
If you look at our friends in Korea who are housing two of the memory giants,

Ejaaz:
they're all leveraged up, they're all borrowing from their banks.

Ejaaz:
So I don't think we've quite seen that extent here in the West.

Ejaaz:
But I do think we are in a position where like it could go up, it could go down.

Ejaaz:
I don't know. But over the long term, I do believe infrastructure is still very

Ejaaz:
much in demand and Leopold will ultimately end up being right,

Ejaaz:
which is a very, very expensive lesson to learn on your wedding weekend.

Ejaaz:
And I hope that the guy makes it out because like he's still,

Ejaaz:
he's 25 years old. And I've seen a lot of people like hating on him.

Ejaaz:
And like, listen, I understand, I get it. He's lost a lot of money.

Ejaaz:
It was very irresponsible.

Ejaaz:
But to pull something off, to have the returns that he had, he's still 80% up

Ejaaz:
on the air. If you want to kind of take that number at face value,

Ejaaz:
he's beaten a lot of the traditional head front still, right after this entire

Ejaaz:
drawdown. And I hope he learns from it.

Ejaaz:
And I think that he probably will and his thesis will play out.

Ejaaz:
The next thing is RSI, recursive self-improvement. Josh, maybe we need to do

Ejaaz:
an episode on that, I think.

Josh:
Yeah, we're going to talk about that and many other things. There's a lot of

Josh:
moving pieces now that are happening.

Josh:
And when we look at the market, it's like we don't really know where things

Josh:
are going. So the best you could do is guess.

Josh:
And we've seen these guesses with like many, many multiples on the revenue of these companies.

Josh:
It's starting to compress a little bit. We're starting to see that because of

Josh:
the uncertainty. A lot of these companies are at capacity in terms of the bandwidth

Josh:
that they can create. So the only surprises can come really from the downside

Josh:
as opposed to the upside.

Josh:
And there's a lot of these like market forces that are at play that are pushing against

Josh:
this thesis at least in terms of the the memory companies the ai companies like

Josh:
when you think about china they're getting much closer they're starting to turn

Josh:
these tokens into commodities if they do they're fighting

Josh:
an energy war with the u.s instead of an intelligence war with the u.s that makes things kind of,

Josh:
slightly in their favor but i do agree on like the infrastructure trade at least

Josh:
we need so much more power we need so much more memory we need so much more

Josh:
tokens and assuming that continues to hold true um you got to assume that leopold

Josh:
will be there so like nothing but respect for the guy sucks uh.

Josh:
That's a bummer sorry to hear that you know what could have helped leopold is

Josh:
if he was perhaps using i mean ledger have you heard of this because if you

Josh:
are building with ai agents you're probably worried about security and an agent with unchecked access

Josh:
is a problem um you can think of a portfolio with leverage is a problem similar

Josh:
types of problems except

Josh:
ledger is protection to help you solve this problem ledger lets the agents propose

Josh:
it lets humans approve and then ledger signers enforce so there's this three-step

Josh:
process that works with cloud code codex

Josh:
cursor it's open source it's available today it works with all the things that we

Josh:
work with there's basically this thing called the ledger agent stack and it

Josh:
fixes this using open source tools that allow you to engage with agents and

Josh:
then tell them exactly how you want things done approving them along the way

Josh:
so thank you so much to ledger for sponsoring this episode

Josh:
hopefully leopold can find his own version of ledger and yeah uh you can find

Josh:
the link in the description down below at developer.ledger.com.

Ejaaz:
Can we end this with a meme?

Josh:
You got one?

Ejaaz:
Let's see. Por favor. Yeah, I got one.

Josh:
We named the fund situational awareness, but lacked the situational awareness

Josh:
to sell when we were up 2200% in two years.

Josh:
That's pretty good.

Ejaaz:
That's pretty good. Some of these memes are so good, dude.

Josh:
It brings me pain because it's like, yeah, dude, obviously. But also,

Josh:
I mean, oh shit, I would stay rose gone too. Just with less leverage. Don't use leverage.

Ejaaz:
Everyone knows. The lesson here is stay away from leverage, guys.

Ejaaz:
Or if you're going to use leverage, certainly don't do 4X on a $45 billion book.

Ejaaz:
What are you doing? You don't need $100 billion.

Ejaaz:
Just you're already one of the best performing headphones in the world.

Ejaaz:
Like, just chill out. But we will keep track of everything that is unraveling.

Ejaaz:
When Josh and I filmed the last episode covering the Leopold story,

Ejaaz:
which was literally a few days ago, the news was breaking as is.

Ejaaz:
And as we wrapped up recording, all of this stuff came out.

Josh:
So we were like, oh my God, we need a whole episode.

Ejaaz:
We were like, we need to do another episode. So this is that episode.

Ejaaz:
So if you enjoyed it and you are listening to this on YouTube or Spotify or

Ejaaz:
Apple Music, wherever you are, please give us a rating, leave us a comment.

Ejaaz:
It helps us out massively. We've been hearing from a lot of you.

Ejaaz:
I got accosted in the street, Josh, from another fan that walked up.

Ejaaz:
Dude, that's crazy. I was like, well, he goes, hey, you're that podcast guy.

Ejaaz:
Like you were speaking about this episode.

Ejaaz:
We're making moves. But I do say like if you see us in the street,

Ejaaz:
like we would love to say hi to you. Like we don't know.

Ejaaz:
We haven't met too many of our listeners that aren't, I guess,

Ejaaz:
extended family and friends. So please come out to us, say hello,

Ejaaz:
leave us a comment if you would like.

Ejaaz:
It helps us out massively. Is there anything else?

Josh:
We're covering both coasts now. I came back from SF. Eden is now in SF.

Josh:
We're just like, we're going bi-coastal. We're getting the show done either

Josh:
way. if you did enjoy this.

Josh:
Don't forget, one of the most important things you could do is give us a new

Josh:
listener. Share it with a friend who might also enjoy this. That really goes

Josh:
a long way. And then, yeah, if you ever do see us, say hi. I mean, that'd be pretty cool.

Josh:
It's fun to see the numbers on the screen translate to people in the real world.

Josh:
So that's always a really good time. I hope you get recognized more.

Josh:
You should just like, I don't really, I'm not super familiar with SF,

Josh:
but like you should just go to like the hotspots, Ejaz, and just kind of sit

Josh:
there and try to aura farm. Like, let me know if anyone comes up to you and

Josh:
says hi and just like report back how many fans we actually have.

Ejaaz:
Hey, maybe I'll see Leopold at a cafe at this point, dude. I think the dude's

Ejaaz:
down bad. Maybe he'll be down to have a conversation. Well, wish him well for me if you do,

Josh:
Because I really hope he pulls it together. I hope that this fund manages to

Josh:
claw its way back, because I'm sure it will.

Josh:
And yeah, that's Leopold's story. So thank you all so much for watching,

Josh:
as always, and we will see you tomorrow on the next one.