SITUATION BREWING: Google and Blackstone are set to announce an AI cloud computing company built on Google's TPU offerings, the WSJ is reporting. The deal would involve a $5 billion investment from Blackstone and is to be announced later today.

Here's how to monitor the Iran situation this week: 1. Watch oil and the 10-year yield. 2. Watch Flightradar for US asset buildup or unusual evacuations. 3. Watch maritime alerts for IRGC activity around the Strait of Hormuz. @TheRealDanSaedi says those are the clearest public signals for whether the standoff is moving toward a deal or another escalation.

SITUATION EXPLAINED: @avipat_ recently went viral for posting a video saying that General Catalyst backed Luel AI, a 1:1 rip-off of his company, Kled. "TL;DR on the drama is, a couple of days ago I was scrolling Twitter and I saw a post from General Catalyst saying that they backed Luel AI." "I clicked the website and I don't think I've been that angry at something in my entire life. I started immediately crashing out." "I posted [a video] showcasing almost an exact one-to-one on our website." "The data they're collecting is all coming from Nigeria. They have 113 people on their website in organic traffic. The rest of it is all paid. It's pretty egregious stuff."

SITUATION EXPLAINED: A Trump post name-dropped a list of regional leaders saying that they had all asked the US to hold off on an attack on Iran planned for Tuesday this week. @TheRealDanSaedi says this looks like a classic case of Trump Diplomacy. "We are going to do a full-scale assault, but here's another 48 hours to give me the best deal."

We asked @Dratchcap why Leopold Aschenbrenner would own puts on AI stocks if his whole fund is built around the AI boom. He says the puts look more like risk management than a bearish call. “I think it’s just smart risk management.” “He’s got these big positions that he wants to stay in.” “If you have puts that protect you on the way down... that’s sort of a synthetic equivalent of buying the dip.” “I don’t think he’s negative NVIDIA.” “The better trade has been to move down the risk curve from the biggest and the best into things that are a little bit smaller in market cap.”

SITUATION EXPLAINED: Why are people booing AI/Eric Schmidt's speech? @brexton: Silicon Valley is underestimating how anxious everyone else is about entry-level jobs, data centers, and being told AI is inevitable. "People don't take it kindly when you talk about AI as an inevitability."

SITUATION DETECTED: Musk says he will appeal the OpenAI verdict. We asked @ns123abc to break it down: The jury never reached the substance of Musk's claims, only whether he brought them too late. If an appeal revives the case, the real fight over OpenAI's nonprofit mission could come back. "The main claims that he put against the defendants, they still hold. They're not answered."

We asked @dratchcap: what is Leopold Aschenbrenner really betting on? “What I see in his stuff is, he’s very focused on the build-out.” “He’s got different flavors of the Bitcoin miners, which are the BTC to data center conversions.” “They all trade on a dollar per megawatt type thing... how much power do you in theory have?” “The push towards AGI is really a push in the near term towards securing enough power to generate tokens.” “He’s going after things that have a faster time to power.”

We asked @somewheresy: How do we get datacenters and new things built while still preserving culture and people's wellbeing? " In a very real materialist way, the Bay Area could start throwing more events in Oakland and talking to the community." "I think they have a responsibility to talk to people and hear them out and try and listen to them on what sort of solutions in the middle that we could pursue." "The alternative is that we don't build any electrical capacity, things continue to get more expensive, everybody has disemployment and an inability to make ends meet anyway, and we're all left off in a worse situation than we are currently." "It's incredibly important for us to go to these spaces where they're dealing with these very tangible effects of these build-outs and try and figure out how exactly we can retool resources into these communities to where at least the delta of their quality of life is not net negative, and at best, they're positively affected by these build-outs."

We asked Washington Post tech reporter @GerritD whether the OpenAI trial got AGI-pilled. He says Elon Musk tried to make the case about AI safety and humanity's future, but the judge kept pulling it back to corporate litigation. "The judge didn't want this to be a... you know, sort of a doomer versus accelerationist trial." "I think that's probably pretty wise. I think she realized that if suddenly we had to sort of explain, 'Okay, this is what this means, this is what existential risk is,' yada, yada, yada, it would've kind of become bigger than the questions, the legal questions that she wanted to keep the trial focused on."

SITUATION EXPLAINED: The CLARITY Act, a bill that sets federal rules for the cryptocurrency industry, just cleared the Senate Banking Committee 15-9, advancing the crypto industry's top legislative priority one step closer to becoming law. "It is a robust regulatory framework for what's called market structure. You can think about the CLARITY Act as doing four core things: 1. It actually creates a robust regulatory framework for intermediaries, think trading platforms, brokers, dealers, custodians that touch digital assets, and it seats that regulatory authority principle of the Commodities Futures Trading Commission, the CFTC. 2. It creates a disclosure framework for people who are launching tokens, and that improves information available in the market and general market quality. 3. It also creates a token taxonomy: what is the security, what is the commodity that helps people launch tokens and allows tokens to actually become more useful. 4. It protects open source developers of non-custodial projects to be able to exercise their rights in developing software without fear of, of government overreach or enforcement actions."

SITUATION ANALYSIS: Situational Awareness explained Leopold Aschenbrenner’s fund, Situational Awareness, files 13F this morning. Reported notional value $13.7B, an increase of 148% from $5.52B last quarter. Puts: The AI hardware/capex complex: VanEck Semiconductor Sector ($SMH), NVIDIA ($NVDA), Oracle ($ORCL), Broadcom ($AVGO), $AMD Long on: Power/fuel cells (Bloom Energy, $879M + $55M calls = $934M), memory (SanDisk, $724M stock + $389M calls = $1.1B total), AI cloud (Coreweave, $556M stock + $141M calls = $697M), crypto mining/data centers (CleanSpark, IREN, Applied Digital, Riot, CORZ, etc.) Straddles: Both puts and calls on two of the same names: - Micron ($MU): 4.27% put + 3.09% call - Taiwan Semiconductor Manufacturing ($TSM): 3.91% put + 2.59% call Inflow: 32% of this quarter’s AUM growth came from new LP inflows. Exited completely: Lumentum Holdings (optical communications), Coherent (also optical), EQT Corp (natural gas), Cipher Mining (secondary miners), Tower Semiconductor (specialty chips). Takeaways: Leopold has broken the future down along two timelines: 1. In the short term, this is a volatility-aware hedge. Over 60% of the fund’s reported notional is now in puts on AI hardware: crash insurance for a crowded market where export controls, Taiwan risk, China, and a tight supply-demand imbalance can all force sharp repricing. 2. But in the long term, this is an optimistic, future-facing bet on the layer beneath the GPUs: the power that they run on, the cooling that they rely on, and the land that they’re built upon. Compute is currently the scarce resource that everyone’s focused on, but this is where they’re betting that the next bottleneck is most likely to arise. Note: 13Fs report options as notional exposure, not market value. Without knowing how sensitive the puts are to moves in the underlying asset, a position that looks like a massive short may be a much smaller hedge.

SITUATION ANALYSIS: @GerritD says the OpenAI trial gives the company a much cleaner answer to the nonprofit criticism that has followed it for years. OpenAI can now point to the court and the coming IPO path when critics ask why a nonprofit-controlled company is building products, data centers, and making founders billionaires. "Stop talking about our nonprofit structure. Stop complaining. Everything is fine. We're gonna go public."

SITUATION UPDATE: Leopold's 13F is out. Moves include bets against NVIDIA, Intel and Broadcom in the form of put options. The reported number is the notional value, not market value - meaning the trades may just be a hedge and the amount he has at risk is much less than reported. His largest long positions are Bloom Energy, Sandisk and CoreWeave.

Leopold Aschenbrenner has quickly made a name for himself in the hedge fund world with his bold bets on AI. As the world waits for his 13F, we built a way to understand how other hedge funds are positioned in the AI trade. Our latest drop: