In June 2024, a former OpenAI researcher named Leopold Aschenbrenner published a 165-page essay arguing that the coming age of artificial intelligence would demand an enormous build-out of physical infrastructure. Chips, memory, electricity and data centers would all be needed in quantities the world had not planned for. He then turned that argument into a hedge fund called Situational Awareness, and the fund bought the thesis heavily, owning the companies that supply the AI boom while betting against software firms expected to be disrupted by it.

For a while it looked like genius. The Financial Times reported that the fund returned 439 percent in the first half of 2026 and 1,551 percent since it launched. At the start of July, it managed about $45 billion. Then the market turned. AI infrastructure stocks fell, and the software shorts went the wrong way at the same moment. Prime brokers issued margin calls, and the fund, which was reportedly leveraged up to 400 percent, had to sell its public holdings to Ken Griffin's Citadel at below-market prices. Within days its assets had dropped to roughly $10 billion. A letter to clients admitted the fund had let them down.

Barely a week later, the fund was investing again with a $400 million bet. Aschenbrenner clearly still believes the thesis because it may well be right. The structure around it is what nearly ended him. Concentration produces wealth but diversification protects wealth. Situational Awareness proved the first half in June and the second half in July, and your career faces the same test.

Nobody makes 1,551 percent by owning a little of everything. The fund picked one idea, learned it deeply and committed hard. Psychologist Anders Ericsson and his colleagues found a similar pattern in their paper on deliberate practice. Elite performance came from sustained, narrow effort on one demanding skill over years, not from broad exposure. If you want to be the engineer people call for the hardest problem in your field, concentration is not optional. Depth is where your leverage comes from.

Being right about the thesis does not make you safe

The fund's belief in AI infrastructure did not change in July. What changed was that it had no room to be wrong for a few weeks. Leverage removed its ability to wait, so someone else chose when it sold and at what price.

Engineers carry their own version of leverage. Fixed obligations, a single employer, one visible skill and no financial runway all mean a bad quarter can force your hand. You can be completely right about where your field is going and still be unable to survive the stretch before it gets there.

A hedge that fails with the position is not a hedge. The fund did have a hedge. It was short software companies, the mirror image of its bet on AI infrastructure. But both sides were expressions of the same thesis, so when the momentum reversed they lost together.

Anyone who has designed a resilient network knows this failure. Two links look like redundancy until you discover they run through the same conduit and share the same risk group, and one backhoe takes out both. Economist Harry Markowitz made the financial version of the argument in his 1952 paper on portfolio selection. The protection comes from combining things that do not fall at the same time, not from owning more of them.

For your career, a second lane that depends on the same employer, the same vendor or the same technology shift is the same conduit. Real independence looks different. It might be a skill valued in another industry, a network in another company, or an income source that does not care what happens to your day job. Sociologist Mark Granovetter's study of weak ties found that people often heard about opportunities through loose acquaintances, because those acquaintances lived in different networks.

Diversify while you still get to set the terms

Citadel bought the fund's positions at a discount because the fund had no choice but to sell. That is the real cost of waiting. There is a large difference between selling and being sold, and it is mostly a difference in timing. Build the second lane and the runway while your primary one is strong and nobody is forcing anything. Then a reorg, a layoff or a shift in your industry becomes a decision you get to make on your own schedule. So concentrate until you are the person people call, and then protect that position with paths that fail for different reasons than the first one does.

Until next time,

Kayode