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Leopold Aschenbrenner Unwinds AI Positions as Market Faces Structural Bottom Following Massive Leverage Washout

Leopold Aschenbrenner, a former OpenAI employee turned AI guru, recently unwound all of his positions due to severe trading losses. This move follows a period of extreme leverage in the AI sector, where investors became greedy during a bull market that saw tech giants like Meta Platforms and Alphabet spending billions on infrastructure. While the AI trade initially soared, it recently experienced a violent unwinding. In South Korea, more than 1.2 million leveraged retail trading accounts triggered margin calls, representing approximately 3.4% of the adult population. This structural purging, caused by forced liquidations and margin calls, is now allowing for a healthier low-leverage accumulation phase to begin. Market analysts suggest that the massive leverage unwind is largely over, reaching its nadir today. This reset allows investors to evaluate whether the massive AI capital expenditure will pay off as monetization ramps up to clear the cost of capital before assets depreciate.

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