Leopold Stays in the Game, Big Tech Earnings, OpenAI Slashes GPT-5.6 Prices | Diet TBPN
Speakers
John Coogan
— Co-Host, TBPN
Tyler
— Guest Co-Host
Summary
The episode covers Leopold Aschenbrenner's Situational Awareness LP letter after its July drawdown and public-book sale to Citadel, arguing the fund is down but not out and remains bullish on AI. It also recaps Big Tech earnings from Microsoft, Apple, Amazon, Meta, and Alphabet, where AI CapEx and cloud results drove sharp and selective stock moves. Finally, it discusses OpenAI's latest efficiency push via cheaper model pricing and improved benchmark performance.
- Leopold Aschenbrenner's Situational Awareness LP reported a -67% July month-to-date drawdown but remains open, unlevered, and up 80% year-to-date.
- The fund sold its public equity book to Citadel and kept private positions such as Anthropic; hosts frame it as down but not out.
- John expects AI-driven volatility to persist for years, with Mag 7 names moving sharply on CapEx and AI diffusion news.
- Microsoft and Amazon highlighted positive AI/cloud momentum, while Meta was punished for AI spending and cost misses.
- Apple briefly crossed $5 trillion in market cap but reversed sharply lower; Alphabet showed cloud strength but AI infrastructure cost concerns.
- OpenAI cut costs for its cheapest model and improved benchmark performance via API settings, but this is not directly tradeable.
Ideas
AI may intensify Mag 7 volatility
John expects AI to keep intensifying market volatility for years because CapEx uncertainty and the AI trade are driving trillion-dollar Mag 7 companies to move 9-16% on earnings updates; he says he has never seen Mag 7 trade like this.
AI fundamentals accelerating while prices fell
Citing Leopold's letter, John says the fund remains very optimistic on the current opportunity set because underlying AI technical and business fundamentals are accelerating while many AI stock prices have declined significantly; the long AI thesis still holds.
Azure acceleration drove Microsoft's surge
Microsoft beat fiscal Q4 expectations with revenue of $90B and EPS of $4.74, and Azure revenue accelerated 43% year-over-year; shares surged as Microsoft led Big Tech, supporting a bullish stance.
Apple beat then reversed sharply
Apple beat expectations and briefly pushed its market cap above $5 trillion, but the stock reversed and is down about 9.47% today; the setup reflects sharp post-earnings volatility and investor selectivity.
AWS acceleration lifted Amazon stock
Amazon impressed with revenue up 20% to $200.6B and AWS growth of 37% to $42.4B; shares rose sharply after hours and are up about 15% today, supported by cloud acceleration.
Meta's heavy AI costs hurt stock
Meta posted stronger-than-expected revenue, but EPS missed and investors focused on $31.1B quarterly CapEx plus $3.6B legal and severance costs; shares fell sharply, making the name unattractive in the current AI cost regime.
Alphabet cloud strength versus AI costs
Alphabet beat revenue and EPS, and Google Cloud revenue surged 82% to nearly $24.8B, but investors remain focused on escalating AI infrastructure costs; this creates a mixed watch setup.
