Welcome to Eye on AI, with AI reporter Sharon Goldman. In this edition\u2026the rise of Leopold Aschenbrenner, a 23-year-old AI researcher turned hedge fund manager\u2026the IMF and the Bank of England both warn of the dangers of a financial bubble around AI\u2026and figures that show enterprise AI adoption is growing significantly. <\/p>\n
The chorus of warnings about an AI bubble is growing louder. Yesterday, the IMF and the Bank of England became the latest to warn that global markets could face trouble if investor enthusiasm for AI takes a dive.<\/p>\n
Yet in Silicon Valley and beyond, that enthusiasm shows no sign of slowing. Investors aren\u2019t just backing companies anymore. They\u2019re betting that artificial general intelligence (AGI)\u2014AI systems as capable as, or more capable than, humans\u2014is right around the corner, with enormous rewards for those who get in early.<\/p>\n
Few stories capture that better than the rise of 23-year-old Leopold Aschenbrenner, a former OpenAI researcher who became famous in AI circles for penning a monograph about the implications of AGI, and then launched a hedge fund based largely on that monograph that now manages more than $1.5 billion. I was so fascinated by Aschenbrenner that I spent the past few weeks digging into his story. The result is a Fortune profile<\/a> based on interviews with more than a dozen of his friends, former colleagues, and acquaintances, as well as investors and Silicon Valley insiders. (Aschenbrenner declined to speak to me.)<\/p>\n Who is Leopold Aschenbrenner? As I write in the story:<\/p>\n A Columbia valedictorian at age 19, [Aschenbrenner] spent time at the philanthropy arm of Sam Bankman-Fried\u2019s now-bankrupt FTX cryptocurrency exchange before a controversial year at OpenAI, where he was ultimately fired. Then, just two months after being booted from the most influential company in AI, he penned an AI manifesto that went viral \u2014 even earning praise from Ivanka Trump on social media \u2014 and used it as a launching pad for a hedge fund that now manages more than $1.5 billion. That\u2019s modest by hedge-fund standards but remarkable for someone barely out of college. Just four years after graduating, Aschenbrenner is holding private discussions with tech CEOs, investors, and policymakers who treat him as a kind of prophet of the AI age.<\/p>\n It\u2019s an astonishing ascent \u2014 one that has many asking not just how this German-born early-career AI researcher pulled it off, but whether the hype surrounding him matches the reality. To some, Aschenbrenner is a rare genius who saw the moment \u2014 the coming of humanlike AGI, China\u2019s accelerating AI race, and the vast fortunes awaiting those who move first \u2014 more clearly than anyone else. To others, including several former OpenAI colleagues, he\u2019s a lucky novice with no finance track record, repackaging hype into a hedge-fund pitch.<\/p>\n Reporting the story, what struck me most is how belief itself has become a form of capital \u2014 how people are literally investing in a worldview about where AI is heading. That belief translates into real money: billions flowing into chips, data centers, and hedge funds built not just on financial models, but on the conviction that AGI is not only inevitable \u2014 but imminent.<\/p>\n Whether or not investors like Aschenbrenner are fueling the bubble is beside the point. His rise shows how belief \u2014 in AGI, its timing, its inevitability \u2014 has become one of the most powerful forces in the AI economy. Companies like OpenAI and Anthropic are making their own versions of the same bet \u2014 that AGI is coming soon, and that belief is worth billions.\u00a0<\/p>\n Aschenbrenner\u2019s fund is essentially the financial-market expression of that faith \u2014 one investor in the fund told Fortune that Leopold said that \u201cAGI was going to be so impactful to the global economy that the only way to fully capitalize on it was to express investment ideas in the most liquid markets in the world.\u201d\u00a0<\/p>\n I\u2019ll admit, the idea of \u201cexpressing\u201d a belief through a hedge fund was new to me as a tech reporter more used to model weights than portfolio weightings. But it did help me make sense of some of the bubbly fizz coursing through the AI world right now \u2014 and why so many are starting to worry it could all burst.<\/p>\n Read the full story here<\/a>. With that, here\u2019s more AI news.<\/p>\n Sharon Goldman FORTUNE ON AI<\/p>\n AI isn\u2019t in a bubble\u2014the cash (and the hype) are real, these analysts say<\/a> \u2013 by Jim Edwards<\/p>\n How business leaders can survive a \u2018phenomenal\u2019 AI bubble<\/a> \u2013 by Alyson Shontell<\/p>\n Section 230 protected social media companies from legal responsibility for misinformation. AI chatbots could be about to change that<\/a> \u2013 by Beatrice Nolan<\/p>\n AI IN THE NEWS<\/p>\n OpenAI and Anthropic are considering using investor funds to settle potential claims from multibillion-dollar lawsuits. According to the Financial Times<\/a>, OpenAI and Anthropic are exploring whether they might use investor funds to help cover potential liabilities from a wave of multibillion-dollar lawsuits, as traditional insurers hesitate to offer full protection against AI-related risks. OpenAI reportedly worked with insurance broker Aon to secure up to $300 million in coverage for emerging AI risks, though the true figure may be lower\u2014and in any case, far short of the potential damages. Insurance executives told the FT that the industry lacks the capacity to handle the kind of systemic, large-scale losses AI models could trigger, reflecting the sector\u2019s broader unease about underwriting the unprecedented risks posed by generative AI providers.\u00a0<\/p>\n IMF and BoE warn AI boom risks \u2018abrupt\u2019 stock market correction. The Financial Times <\/a>also reported that both the International Monetary Fund and the Bank of England have warned that global stock markets could face a sudden correction as the artificial intelligence boom drives valuations to levels reminiscent of the dotcom bubble. IMF managing director Kristalina Georgieva cautioned that bullish sentiment about AI\u2019s productivity potential could \u201cturn abruptly,\u201d threatening global growth\u2014particularly in developing economies. The BoE\u2019s Financial Policy Committee similarly noted that U.S. stock valuations are approaching those seen at the height of the 2000 tech crash, pointing to an \u201cincreased risk of a sharp market correction.\u201d Still, figures such as Nvidia\u2019s Jensen Huang and San Francisco Fed president Mary Daly argued that today\u2019s AI surge differs from the dotcom era, fueled by wealthier tech giants and productive investment rather than speculation.\u00a0<\/p>\n Why America builds AI girlfriends and China makes AI boyfriends. I thought this was a fascinating piece in a great Substack newsletter, written by multiple contributors, called ChinaTalk<\/a>. In the article, an Oxford researcher named Zilan Qian explores why America\u2019s AI \u201ccompanions\u201d tend to be girlfriends while China\u2019s are boyfriends\u2014and what that says about both societies. The U.S. market, dominated by apps catering to young men, reflects a mix of manosphere culture, loneliness, and the monetization of sexualized AI fantasy. In contrast, China\u2019s booming \u201cAI boyfriend\u201d industry largely targets urban women amid falling marriage rates and government anxiety over birth declines. Qian argues that these gendered trends reveal how culture, regulation, and demographics shape not just who builds AI\u2014but what kinds of emotional worlds we build with it.\n<\/p>\n AI CALENDAR<\/p>\n Oct. 6-10:\u00a0World\u00a0AI\u00a0Week, Amsterdam\n<\/p>\n Oct. 21-22: TedAI San Francisco. Apply to attend here.\n<\/p>\n Nov. 10-13: Web Summit, Lisbon.\u00a0<\/p>\n Nov. 26-27:\u00a0World AI Congress, London.\n<\/p>\n Dec. 2-7:\u00a0NeurIPS, San Diego\n<\/p>\n Dec. 8-9:\u00a0Fortune Brainstorm\u00a0AI\u00a0San Francisco. Apply to attend\u00a0here<\/a>.\n<\/p>\n EYE ON AI NUMBERS44%<\/p>\n
sharon.goldman@fortune.com<\/a>
@sharongoldman<\/a><\/p>\n