Last year, Leopold Aschenbrenner, a man barely of legal drinking age with a fondness for Rubik’s Cubes, crisscrossed the nation to raise money for his high-flying hedge fund.

An ex-researcher at OpenAI, who departed there in a cloud of controversy and then wrote a viral essay predicting an artificial intelligence revolution, Mr. Aschenbrenner had started his fund, Situational Awareness, in 2024 at age 22 with a burst of attention. That November, he raised $100 million from big names in the tech world and immediately began going whole hog into A.I. investing.

From an office in the Bay Area that he shared with a podcast studio, he poured money into fledgling start-ups, chipmakers and data center companies — pretty much anything that could even vaguely benefit from the A.I. boom. The fund began reporting staggeringly high investment returns, quadrupling its investor money in mere months. It borrowed huge sums — tens of billions of dollars — from Wall Street banks to make ever-bigger bets.

When this star of San Francisco arrived in New York during his fund-raising tour around last summer, however, he received a relatively cool reception, according to three people from whom he tried to raise money, who declined to be identified talking about a private fund. They said they viewed him a lightweight and a one-hit wonder. The asset management colossus Blackstone, the world’s largest investor in hedge funds, passed on investing, according to two of those people.

One wealthy New York investor who did take the meeting welcomed Mr. Aschenbrenner into his downtown office, and then gave him a grilling, according to the investor, who declined to be named publicly because he had agreed to keep the contents of the fund’s pitch private.

What was Mr. Aschenbrenner’s plan if the A.I. revolution didn’t pan out quite as hoped? The hedge-fund founder had no detailed response, the investor recalled. Mr. Aschenbrenner simply truly believed it would all work out.

An early answer to that question arrived this week. When A.I. stocks dropped quickly, felled by questions about whether the technology would be quite as transformative as promised, Goldman Sachs — one of Situational Awareness’s larger lenders — demanded the payback of some of its loans, according to two bankers involved in the process.

The hedge fund couldn’t — not without holding a last-minute fire sale. Over the next 30 hours, it worked to get rid of roughly $20 billion in stocks. As it frantically called rivals for help, the firm’s representatives claimed that it was hocking a portfolio of so-called hedges, or modest investments meant to protect from risk, that were now in distress, according to three people briefed on the entreaties.

That made little sense as potential buyers examined what was for sale: These were monster bets, many against companies like Adobe that the fund thought would be replaced by A.I. but now suddenly appeared stronger than ever, the three people said. These wagers formed a huge swath of the firm’s total investments.

Scared to take on so much risk, some passed on the stocks on offer. The hedge fund Citadel eventually came to an agreement to buy much of them at a discount, a deal sealed in an early morning phone call Thursday between Mr. Aschenbrenner and Citadel’s billionaire founder, Kenneth Griffin.

Situational Awareness survived. One person briefed on what remains said it had roughly $8 billion left, down from around $30 billion at the start of July. Most of that is private stakes in companies such as Anthropic, which the firm has wide latitude to value and may or may not be worth what the firm hopes in the end. A minority of what remains is in publicly traded stocks, the backbone of the firm’s original investment thesis.

“We let you down,” Mr. Aschenbrenner wrote to investors at the day’s end, according to a letter viewed by The New York Times. He vowed to “fight another day.” Mr. Aschenbrenner declined through a representative to be interviewed.

The story of Situational Awareness is in some way an old Wall Street lesson learned by every generation and then forgotten by the next. Hot hedge funds, particularly those tied to trendy new investments like A.I., burn bright and then sometimes fall, in some cases taking down the broader markets with them. Indeed, that appeared to have been on the minds of many on Wall Street on Thursday, as news of the company’s struggles broke. The investor Daniel Loeb posted to X a link to purchase the book “When Genius Failed,” about the rapid demise of an infamous hedge fund, Long Term Capital Management.

For now, there is no evidence of an immediate mushroom cloud. A.I. stocks rallied after Citadel came to the fund’s rescue, and the market continued to rise Friday. But that’s being treated on Wall Street as evidence of a reprieve rather than permanent proof the implosion will be contained.

A German native raised in Berlin, Mr. Aschenbrenner enrolled at Columbia University at age 15, studying economics and statistics. He graduated four years later as valedictorian and declined a spot at Yale Law School, choosing instead to work at the philanthropic arm of the crypto brokerage FTX, where he worked on so-called effective altruism, a controversial means of using data to optimize charitable giving. FTX itself soon spectacularly imploded.

He later joined OpenAI for a spell, set apart among the stereotypically nerdy staff by cutting a striking figure: a tall, thin man who combed his hair into a sweeping coif and wore fleeces over turtleneck sweaters.

OpenAI fired him in April 2024, accusing him of leaking company secrets, he has said. He later acknowledged that he had shared a document with several outside researchers, but claimed the document did not include confidential information. He also disputed that this was the reason he was fired, arguing it was related to a separate memo he sent to the OpenAI board in 2023 raising concerns about the company’s security practices.

Two months later he wrote an essay, titled “Situational Awareness,” that went viral across Silicon Valley. It predicted that research labs would develop a superintelligent form of A.I. by 2027, and proposed an investment fund to capitalize on this potential development. Strangers reached out trying to invest money, prompting him to start a hedge fund.

Mr. Aschenbrenner set up shop in a low-slung San Francisco building, with no security desk downstairs. Visitors buzzed up to enter directly onto the trading floor.

An investor document reviewed by The Times offered a hint of the volatility that was to come. It said Situational Awareness would set “no limits” on the types of investments it might make, nor on “the concentration of its investments or the amount of leverage that it may use.”

Asked in a 2024 podcast interview with Dwarkesh Patel what his goals were, he answered: “Eventually you are going to go to the stars, you are going to go to the galaxies.” He added, “Done right, there’s a lot of money to be made.”

That was true for a while, at least while the fund was at the center of the hottest trade on the planet. The fund made a return of more than 200 percent, after fees, in 2025, as anything tied to A.I. shot higher, one investor said.

That continued into the first half of this year, with Situational Awareness continuing to pour more into private, thinly traded companies, such as Fluidstack, which helps construct data centers.

Mr. Aschenbrenner’s firm relied on leverage — money borrowed to amplify its bets. This added to the risks the company faced if the market turned. In his letter to investors on Thursday, Mr. Aschenbrenner said he had ceased using borrowed money, though he stopped short of pledging not to do so again.

“There’s one legitimate criticism, which is they were overly aggressive with leverage and they used it to a point it could have perhaps been existentially threatening,” said John Pfeffer, a Situational Awareness investor since its inception.

He said he was having “a lot less fun than when things were going up” but was “absolutely delighted they are still in business and we didn’t lose more money.”

As recently as this month, Situational Awareness was still telling investors it would be a good time to invest more money with the fund.

And even amid the fire sale this week, the office was calm, said two people who spoke to employees there. One of the only signs that anything had changed was a security guard newly added to the premises.

Mr. Aschenbrenner juggled calls with Wall Street banks and frantic investors with last-minute plans for his wedding, to a member of Anthropic’s staff, slated for Saturday in Carmel, Calif.

It’s still on.

Cade Metz and Eli Tan contributed reporting.