Out of total curiosity: Many AIM seed grants can’t pay for two founders to take 90k a year, or at least, it would be unwise to. How are you thinking about the concern that if AIM pays sensibly for internal staff, that this could draw talent away from founding, which often can’t afford to pay as well? (I worry these aren’t separate talent pools, given the crossover between AIM staff and AIM founders!)
I don’t think the difference between $100m and $50B is that substantial for my point. Even though they are two orders of magnitude apart, I think the limit on how much money you should trust with someone who has no prior experience managing money is lower than that.
His creditors supplied the money—it is their judgement I’m questioning.
The losses, as you pointed out, happened due to highly leveraged bets. He didn't expect memory stocks to bleed as much as they did.
This is disqualifying if you are running a hedge fund. It’s literally in the name—you are supposed to hedge your positions in order to prevent an unexpected situation from tanking the whole fund.
Besides, it is possible that the fund will survive because his core thesis has paid off exceptionally well so far
We don’t judge funds by whether they don’t go bankrupt, we judge them by their performance against a market index over a long period of time. Even if the positions are net up by 2× or so, this is not particularly impressive in and of itself over a short period, because of survivorship bias. If you make a bunch of stupidly leveraged bets on different sectors, one of them is likely to pay off very well, but not for long, and not through downturns.
The AI sector has monotonically gone up since the release of ChatGPT—any overleveraged investor in this space would be likely to produce incredible gains. If one’s fund gets obliterated at the first market downturn because one was overleveraged, all this proves is that you managed your fund badly, not that you’re some kind of savant genius market whisperer.
(c.f. anything written about Cathie Wood in 2022—a lot of it has aged very poorly)
To this community’s credit, much of the discussion of his paper and career plans was skeptical. I think Aschenbrenner is a useful template for the kind of person that we need to have our guards up around, for a future where large sums of money enter the movement through the Third Wave.
I don’t think he was working in bad faith, and probably didn’t have bad intentions. However, it is objectively nuts to put a 24-year-old with no experience in charge of a $50B hedge fund. This is very different from giving a 24-year-old a $100k/year charity or EA Funds project. We should not assume that clear skills and intelligence in one domain should ever cleanly map to others.
We should also have learned the lesson from FTX that an inexperienced person speaking with confidence, or dazzling people with technical prowess, is much more likely to simply be inexperienced than a child prodigy. You are not immune to the Dunning-Kruger effect.
If I may speculate, both of these seem to have roots in some of the broader psychological flaws underpinning the ratsphere and the valley more broadly—namely, that intelligence is a fixed, general attribute, and that precociousness is overlooked only because traditional power structures are trying to protect themselves. These are not necessarily or always untrue, but some parts of the community who notice that these are not generally accepted ideas overreact, and overindex on them.
There will be more Aschenbrenners approaching this community in the future, and we should welcome them—but we shouldn’t hand them the controls right away just because they dazzle us.
(P.S. I notice that Leopold’s CV also includes ‘Fund Manager, FTX Future Fund’)
Situational Awareness (the hedge unhedged fund) has imploded. It seems much of their gains were from overleveraging their trades, which has then caused them to, in some readings, undergo the largest absolute short-term fund loss in history (over $10B in a few weeks).
The only thing worse than discovering your AI hacked a live public service is discovering your AI hacked a live public service 4 months after the fact because it happened to your competitor 😭
I don’t know how you get around this, but the framing of ‘lives saved’ feels a bit off, if you’re not going to count ‘deaths caused’. For example, there’s a guy on there who’s probably responsible for a few million deaths, give or take, because he pretty much single-handedly shut down USAID. It feels icky to see him up there tbh, given the harm we know he’s done.
Out of total curiosity: Many AIM seed grants can’t pay for two founders to take 90k a year, or at least, it would be unwise to. How are you thinking about the concern that if AIM pays sensibly for internal staff, that this could draw talent away from founding, which often can’t afford to pay as well? (I worry these aren’t separate talent pools, given the crossover between AIM staff and AIM founders!)
I don’t think the difference between $100m and $50B is that substantial for my point. Even though they are two orders of magnitude apart, I think the limit on how much money you should trust with someone who has no prior experience managing money is lower than that.
His creditors supplied the money—it is their judgement I’m questioning.
This is disqualifying if you are running a hedge fund. It’s literally in the name—you are supposed to hedge your positions in order to prevent an unexpected situation from tanking the whole fund.
We don’t judge funds by whether they don’t go bankrupt, we judge them by their performance against a market index over a long period of time. Even if the positions are net up by 2× or so, this is not particularly impressive in and of itself over a short period, because of survivorship bias. If you make a bunch of stupidly leveraged bets on different sectors, one of them is likely to pay off very well, but not for long, and not through downturns.
The AI sector has monotonically gone up since the release of ChatGPT—any overleveraged investor in this space would be likely to produce incredible gains. If one’s fund gets obliterated at the first market downturn because one was overleveraged, all this proves is that you managed your fund badly, not that you’re some kind of savant genius market whisperer.
(c.f. anything written about Cathie Wood in 2022—a lot of it has aged very poorly)
To this community’s credit, much of the discussion of his paper and career plans was skeptical. I think Aschenbrenner is a useful template for the kind of person that we need to have our guards up around, for a future where large sums of money enter the movement through the Third Wave.
I don’t think he was working in bad faith, and probably didn’t have bad intentions. However, it is objectively nuts to put a 24-year-old with no experience in charge of a $50B hedge fund. This is very different from giving a 24-year-old a $100k/year charity or EA Funds project. We should not assume that clear skills and intelligence in one domain should ever cleanly map to others.
We should also have learned the lesson from FTX that an inexperienced person speaking with confidence, or dazzling people with technical prowess, is much more likely to simply be inexperienced than a child prodigy. You are not immune to the Dunning-Kruger effect.
If I may speculate, both of these seem to have roots in some of the broader psychological flaws underpinning the ratsphere and the valley more broadly—namely, that intelligence is a fixed, general attribute, and that precociousness is overlooked only because traditional power structures are trying to protect themselves. These are not necessarily or always untrue, but some parts of the community who notice that these are not generally accepted ideas overreact, and overindex on them.
There will be more Aschenbrenners approaching this community in the future, and we should welcome them—but we shouldn’t hand them the controls right away just because they dazzle us.
(P.S. I notice that Leopold’s CV also includes ‘Fund Manager, FTX Future Fund’)
Situational Awareness (the
hedgeunhedged fund) has imploded. It seems much of their gains were from overleveraging their trades, which has then caused them to, in some readings, undergo the largest absolute short-term fund loss in history (over $10B in a few weeks).The only thing worse than discovering your AI hacked a live public service is discovering your AI hacked a live public service 4 months after the fact because it happened to your competitor 😭
Super super excited, and appreciate the public transparency into your programme!
Thank you so much! This is one of my favourite spaces online because of the work you & the team have done :)
Like, if your goal with this project is to inspire rich people to think about doing good, I wouldn’t include an obviously really bad guy on the list.
I don’t know how you get around this, but the framing of ‘lives saved’ feels a bit off, if you’re not going to count ‘deaths caused’. For example, there’s a guy on there who’s probably responsible for a few million deaths, give or take, because he pretty much single-handedly shut down USAID. It feels icky to see him up there tbh, given the harm we know he’s done.