AI Expert's Hedge Fund Skyrockets with Huge Returns

Welcome back!

Here’s your must-read news this morning:

• Record U.S. stock buybacks

• Rise of AI hedge funds 

• Andreessen’s free speech warning 

I’ve got all the details for you, so let’s dive in.

— Josh

MARKETS

💰 U.S. Companies Shatter Buyback Records in 2025

The Scoop: U.S. companies are repurchasing their shares at a record-breaking pace, with $983.6 billion in buybacks announced in 2025, according to The Wall Street Journal. Tech giants like Apple and Alphabet, alongside major banks like JPMorgan Chase, lead the charge, leveraging strong earnings and tax cuts to boost balance sheets and stock prices.

The Details:

• Buybacks are projected to exceed $1.1 trillion in 2025, a record high, with $165.6 billion announced in July alone, surpassing the previous July record from 2006.

• Apple ($100 billion), Alphabet ($70 billion), JPMorgan ($50 billion), and Bank of America ($40 billion) are among the top repurchasers, driven by cash-rich balance sheets.

• Buybacks reduce available shares, increasing earnings per share and often boosting stock prices, though critics argue they prioritize short-term gains over long-term investments like factories or dividends.

• Skeptics warn that companies often buy shares at peak prices, which could strain profits, potentially slowing buybacks.

What’s Next: The surge in AI-driven tech and banking sector buybacks is expected to propel more firms to launch similar programs, further boosting market indexes. However, if economic cooling erodes profits, companies may shift focus to alternative investments, potentially tempering the buyback frenzy and impacting market momentum.

Markets Roundup

🏦 Economy & Policy

• ⭐ Editor’s Pick: Trump called on China to quadruple its U.S. soybean purchases ahead of an August 12 tariff truce deadline, boosting Chicago soybean prices. (BBG)

• The Trump administration is considering E.J. Antoni, chief economist at the Heritage Foundation, to lead the Bureau of Labor Statistics. (WSJ)

• Federal Reserve Vice Chair Michelle Bowman signaled stronger support for three interest rate cuts in 2025. (RTS)

• The Sanctioning Russia Act, a bipartisan bill, grants Trump authority to impose 500% tariffs on Russian imports and secondary tariffs on nations like China that trade with Moscow. (FBN)

📈 Stock Market

• ⭐ Editor’s Pick: U.S. stock futures edged up early Monday, with Dow Jones futures gaining 100 points, or 0.2%, and S&P 500 futures rising 0.1%, as investors await critical inflation data. (CNBC)

• SoftBank tapped Goldman Sachs, JPMorgan, Mizuho, and Morgan Stanley to prepare a potential U.S. IPO for its Japanese payments app PayPay. (RTS)

• Rumble posted a Q2 loss of $0.12 per share, missing analyst estimates by $0.03, with revenue of $25.08 million slightly surpassing the $25.05 million consensus forecast. (INV)

🏢 Industry

• ⭐ Editor’s Pick: A security researcher uncovered critical vulnerabilities in a major carmaker's web portal, enabling remote unlocking of vehicles worldwide. (TC)

• Intel CEO Lip-Bu Tan will visit the White House Monday after Trump called for his resignation over ties to Chinese businesses. (WSJ)

• Rumble is considering a $1.17 billion all-stock acquisition of Northern Data, a German data-center operator, to expand its cloud-computing capabilities. (WSJ)

💵 Energy & Commodities

• ⭐ Editor’s Pick: The Trump administration will exempt gold bars from tariffs through an upcoming executive order. (INV)

• Scotland’s wind farms were paid to halt operations 37% of the time in early 2025 due to grid constraints, costing Britain billions in curtailment payments. (OP)

• Tesla applied for a license to supply electricity to UK households, aiming to challenge major energy firms. (CNBC)

• Trump will appoint David Rosner as the new chairman of the Federal Energy Regulatory Commission (FERC). (AX)

🌕 Crypto

• ⭐ Editor’s Pick: Bo Hines, executive director of the White House crypto council, will step down to return to the private sector, with deputy Patrick Witt set to replace him. (TB)

• El Salvador’s Bitcoin Office has announced plans to launch the world’s first Bitcoin-focused bank. (CCN)

• Coinbase has launched decentralized exchange (DEX) trading for U.S. users. (CD)

• World Liberty Financial, a Trump family-backed DeFi project, is seeking to raise $1.5 billion for a publicly traded treasury company to hold its WLFI tokens. (BBG)
  

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TECH

💻 AI Expert’s $1.5B Hedge Fund Rides AI Boom with 47% Gains

The Scoop: Leopold Aschenbrenner, a 23-year-old AI prodigy with no prior investing experience, has raised over $1.5 billion for his San Francisco-based hedge fund, Situational Awareness, capitalizing on the AI boom, The Wall Street Journal reports.

The Details:

• Aschenbrenner’s fund targets semiconductor, infrastructure, power companies, and startups like Anthropic, with short bets on industries lagging in AI adoption.

• Situational Awareness, focused on AI-driven global stocks, outperformed the S&P 500 and tech hedge funds in the first half of 2025, gaining 47% after fees.

• Backers include Stripe founders Patrick and John Collison, Meta AI executives Daniel Gross and Nat Friedman, and investor Graham Duncan as an adviser.

• Aschenbrenner, a former OpenAI researcher, named his firm after his 165-page AI manifesto and recruited AI expert Carl Shulman as research director.

What’s Next: The success of Situational Awareness, alongside other AI-focused hedge funds like Value Aligned Research Advisors’ $1 billion fund and Steve Cohen’s $2 billion Turion fund, signals a growing trend. More AI-driven investment firms are likely to emerge as investor enthusiasm for AI technology continues to fuel market opportunities.

Tech Roundup

🧠 AI

• ⭐ Editor’s Pick: The artificial intelligence boom has minted dozens of new billionaires in 2025, with startups like Anthropic and OpenAI driving unprecedented wealth creation. (CNBC)

• Nvidia and AMD agreed to pay the U.S. government 15% of their China chip sale revenues to secure export licenses for their H20 and MI308 chips. (FT)

• China’s AI drug discovery startups are increasingly securing major deals with Western giants like AstraZeneca, using state-backed AI platforms to accelerate development, threatening America's lead in the sector. (ROTW)

• David Sacks argued that, contrary to doomer predictions of a single AI achieving god-like superintelligence, competition among companies has prevented monopolistic control, helping the U.S. win the AI race. (X)

• Microsoft introduced Copilot 3D, a free AI-powered tool in Copilot Labs that converts 2D images into 3D models without requiring text prompts, enabling applications like furniture visualization and 3D printing. (TV)

🤖 Hardware & Robotics

• ⭐ Editor’s Pick: Kaiwa Technology, a Chinese tech company, is developing the world’s first robot to simulate pregnancy, replicating human gestation in a humanoid form. (ECNS)

• Robots duked it out in a boxing match at the World Robot Expo in Beijing, China. (AP)

• Researchers developed a humanoid robot drummer, MusiX, that achieves 90% rhythmic accuracy on complex songs. (IE)

• A $100,000 humanoid robot named KOID stunned New Yorkers by strolling into a Fifth Avenue Rolex boutique to try on a GMT-Master II. (SCB)

🚀 Defense & Space

• ⭐ Editor’s Pick: China’s iSpace launched its first autonomous drone ship, Xingji Guihang, to recover reusable rockets, rivaling SpaceX’s technology. (SCMP)

• Engineers proposed a multi-generational spacecraft with a rotating habitat and sustainable ecosystems to support 20,000 people on a 200-year journey to a distant star system. (LS)

• Australia’s Electro Optic Systems secured a contract from a NATO Member State for its 100kW high-energy laser weapon system, marking the world’s first export order for such technology to counter drone swarms. (EOS)

• Johns Hopkins University is upgrading its AI-enhanced wargaming tools with classified data to identify enemy weaknesses for the Pentagon, enabling faster and more scalable strategic simulations. (IE)

💰 Venture Capital & Deals

• ⭐ Editor’s Pick: South Korean AI chip designer DeepX partnered with Baidu to advance industrial AI applications, while preparing to raise over $79 million in a new funding round. (BBG)

• California-based startup Apreo Health raised $130 million in a Series B round co-led by Bain Capital Life Sciences to treat severe emphysema. (GD)

• TrueMeds, an Indian telehealth platform focused on affordable chronic care, raised $85 million in a Series C funding round led by Accel and Peak XV Partners. (DSA)

• Xpand, a retail technology startup, secured $6 million in funding led by Ibex Investors to launch autonomous "store-in-a-box" units, starting with a flagship store in Vienna. (10SC)

FREEDOM

💬 Marc Andreessen Rips UK’s Online Safety Act as Free Speech Threat

The Scoop: Silicon Valley billionaire Marc Andreessen has challenged Downing Street over the UK’s Online Safety Act, criticizing its impact on free speech and Technology Secretary Peter Kyle’s inflammatory remarks likening critics to predators, according to the Financial Times.

The Details:

• Andreessen, co-founder of Andreessen Horowitz, Meta board member, and a Trump supporter, contacted No. 10 to protest the act and Kyle’s comparison of opponents like Nigel Farage to Jimmy Savile.

• The Online Safety Act, effective since July 2025, requires tech platforms to restrict harmful content for children, prompting widespread use of VPNs to bypass age verification.

• Rep. Jim Jordan (R-OH), chair of the House Judiciary Committee, labeled the act a “censorship law” and met Kyle and Ofcom to voice concerns.

• A UK petition calling for the act’s repeal has garnered over 500,000 signatures, signaling significant public discontent.

What’s Next: Pressure from U.S. tech leaders and UK critics, including calls for a parliamentary review, will likely spur further debate over the Online Safety Act’s scope. As platforms adapt to stricter regulations, expect more tech firms to push back or explore legal challenges.

Freedom Roundup

🏛️ Policy & Culture

• ⭐ Editor’s Pick: Trump is considering reclassifying marijuana as a less dangerous drug. (WSJ)

• Corporate enthusiasm for DEI initiatives has sharply declined, with major firms like Walmart and Microsoft scaling back public discussions. (BBG)

• A new wave of anti-ESG ETFs is gaining traction, favoring funds that prioritize traditional energy and other non-ESG sectors. (TDU)

• Vance said that he hopes Elon Musk will rejoin the MAGA movement by the midterms. (X)

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DISCLAIMER: The CAPITAL newsletter is for informational purposes only and does not constitute financial, investment, or professional advice. Readers should conduct their own research and consult a qualified financial advisor before making investment decisions. The CAPITAL newsletter and its owner and operator, Josh Caplan, are not liable for any loss or damage resulting from reliance on this information. The CAPITAL newsletter is solely owned and independently operated by Josh Caplan, separate from any employer affiliations.