Hedge Fund Manager Adds 'Extinction Risk' Line Item to Portfolio
Bridgewater strategist begins hedging against total human annihilation alongside standard market downturns.
Prominent hedge fund manager Derek Hastings announced Thursday that his $4.2 billion fund will begin formally allocating capital to hedge against AI-driven human extinction, treating it as a standard portfolio risk alongside inflation and recession.
"We've always stress-tested for black swan events—pandemics, currency collapse, nuclear war," Hastings told investors on a quarterly call. "This is really just the next logical step. It's basic fiduciary duty."
The new strategy allocates 8 percent of assets to what Hastings calls "terminal scenario positioning," including long positions in canned goods futures, remote farmland, and a basket of companies manufacturing faraday cages. The fund has also begun shorting the entire S&P 500 with a 2035 expiration date, on the assumption there may not be a functioning stock exchange by then.
"Look, if the AI doom people are right, equities go to zero," Hastings explained. "But if they're wrong, we've only slightly underperformed the benchmark. It's asymmetric risk-reward." When asked how he plans to collect on winning trades if humanity is extinct, Hastings paused for eleven seconds before saying, "We're still modeling that scenario."
The move comes after a wave of AI researchers and tech executives warned that advanced artificial intelligence could pose existential risks to humanity within the decade. Hastings said his team initially dismissed the warnings, but reversed course after running a Monte Carlo simulation that included "paperclip maximizer outcomes."
Other institutional investors are reportedly watching the strategy closely. One pension fund manager, speaking anonymously, said his team had considered similar hedges but worried about explaining a "catastrophic species extinction tranche" to retirees at the annual meeting.
At press time, Hastings was fielding LP questions about whether the fund's extinction hedge would be marked to market daily or only in the event of actual extinction.
