His AI fund experienced a 67% loss within a month, yet thousands continue to replicate his trades.

      Last month, the AI trading sector faced a significant setback, impacting its prominent representative, yet thousands of investors chose to continue supporting him. According to Business Insider, over 5,000 retail investors are still replicating Leopold Aschenbrenner’s stock portfolio, even after his hedge fund nearly fell apart.

      They utilize Autopilot, an application that creates portfolios based on the publicly disclosed holdings of reputable investors and politicians. CEO Brian Schardt informed Business Insider that around $32 million has been invested in its Aschenbrenner strategy since the fund's launch in March until early last week.

      When issues arose, Autopilot offered users the option to stay or leave the strategy. Between $3 million to $5 million was withdrawn, while approximately $28 million, held by over 5,000 individuals, remained.

      The Copycats' Performance

      Investors replicating Aschenbrenner’s moves have performed better than he has. His fund, Situational Awareness, saw a 67% decline in July. Margin calls compelled him to liquidate most of his public holdings at a 10% discount to Ken Griffin’s Citadel. In contrast, the Autopilot version experienced a much smaller loss of about 30% in July and has since recovered by 35% from last week’s lows.

      The difference can be attributed to one key factor: leverage, or the absence of it. Autopilot investors do not engage in borrowing, short selling, or trading derivatives. They simply mirror disclosed holdings and update based on new filings. Schardt remarked, “Ours is not leveraged, which means we don’t take the same risks he did, which is an advantage." Being unleveraged, they experience lesser declines during downturns and lesser gains during rallies. The strategy has risen 53.4% since March.

      A Focused AI Investment

      The portfolio represents a concentrated bet on AI infrastructure, encompassing 14 stocks, with roughly 30% invested in the neocloud company Nebius and about 12% each in CoreWeave and Bloom Energy. These stocks encountered challenges in July due to market anxieties in Asia and concerns regarding big tech's AI spending. However, when Citadel acquired Aschenbrenner’s holdings, these same stocks surged, benefiting those who held onto them.

      The copying trend is expected to persist. Autopilot monitors quarterly 13F filings, allowing investors to remain steady amidst the downturn, with Aschenbrenner’s next disclosure anticipated by August 14. Autopilot indicated that it will continue to mirror his fund as long as it remains active. Additionally, should Anthropic go public this year, one of his largest private investments would also become accessible to these copycats.

      Aschenbrenner is not stepping back either. Since the fallout, he has invested $400 million in a Sequoia-backed company, and partners from Sequoia have told Bloomberg that “he is not going anywhere.” For now, the 5,000 individuals mirroring his moves are also staying put.