Facing Nvidia Earnings. Former OpenAI Researcher Aggressively Shorts Chip Stocks, Pivots to Massive Bets on Miners and AI Energy

TradingKey - Former OpenAI researcher aggressively shorting chip stocks like NVIDIA and Broadcom, believing the second half of the AI race is about power, not chips.

According to CoinDesk reports on May 18, Leopold Aschenbrenner, a former OpenAI researcher and current founder of the hedge fund Situational Awareness LP, spent up to approximately $8 billion in notional value on chip stock put options for Q1 2026, including NVIDIA ( NVDA ), Broadcom ( AVGO ), AMD ( AMD ), and other giants, as well as the VanEck Semiconductor ETF.

At the same time, Leopold Aschenbrenner is aggressively longing Bitcoin mining and AI infrastructure stocks, significantly buying into Core Scientific ( CORZ ), Riot Platforms ( RIOT ), IREN ( IREN ), CleanSpark ( CLSK ), Bitfarms ( BITF ), Bitdeer ( BTDR) and Hive Digital ( HIVE) among other stocks.

Aschenbrenner's operation of "longing AI while shorting AI" may seem contradictory and puzzling, but it is actually a top-tier "barbell hedging strategy" in the current AI investment world, causing a massive sensation across Wall Street and the tech industry.

Over the past year, the semiconductor sector has experienced a parabolic surge, with NVIDIA rising 63%, Broadcom 81%, and AMD 256%. In Aschenbrenner's view, chips are "intangible technological products" that undergo constant iteration and will eventually face overcapacity. This implies that chip stocks will not rise indefinitely and may eventually decline due to extreme profit-taking and "AI bubble risks."

Despite potential chip overcapacity, Aschenbrenner firmly believes that Artificial General Intelligence (AGI) will be achieved around 2027. He contends that the deciding factor in the second half of the AI race will no longer be algorithms or chips, but electricity—which is the main reason for his bet on mining companies, as these firms generally possess contracted power capacity.

This Wednesday (May 20) after the market close, chip giant NVIDIA is expected to release its first-quarter earnings for fiscal year 2027. If NVIDIA's report is flawless and its guidance significantly exceeds expectations, Aschenbrenner's chip stock put options will face the risk of severe premium erosion or becoming worthless, but his long stock positions will rise. If NVIDIA's earnings fall short of expectations, the opposite will occur, which could be even more favorable as it allows for short-term profits through options and long-term gains through long stock holdings, achieving a win-win scenario.