Leopold Aschenbrenner's AI Hedge Fund Collapses From $45B to $10B in Weeks, Sells Portfolio to Citadel
35 Sources
[1]
AI hedge fund Situational Awareness may have sold its public portfolio, but it still has its Anthropic shares
Situational Awareness, a hedge fund formed by former OpenAI researcher Leopold Aschenbrenner, has sold the majority of its public stock portfolio to Ken Griffin's Citadel following steep losses over the past month, the Wall Street Journal reported earlier on Thursday. It's a big comedown for the
[2]
Maybe we shouldn't give 24 year olds billions of dollars to bet on AI
I am not by any means an expert at finance but I think I do now have some advice for people who are: Do not name your hedge fund anything that will be hilarious if it blows up. Don't use a name like "Long-Term Capital Management," or "Amaranth Advisors" (named for the floral symbol for
[3]
Situational Awareness got the future right but misread the past
Leopold Aschenbrenner thought AI-related stocks would go one way; they went the other. The mistake was funding the trades with debt Leopold Aschenbrenner was hailed as a great prognosticator, but he did a poor job of interpreting history. The tech wunderkind's misfortune is a reminder -- useful
[4]
Citadel buys most of Situational's stock holdings after AI share rout, sources say
NEW YORK, July 30 (Reuters) - Situational Awareness, an AI-focused hedge fund run by former OpenAI researcher Leopold Aschenbrenner, sold the bulk of its stock portfolio to Ken Griffin's Citadel after being battered by heavy losses in its tech holdings, two sources familiar with the matter told
[5]
Why Situational Awareness hedge fund imploded, even in a tame stock market
The stock market looked unusually tranquil. Beneath the surface, one of Wall Street's fastest-growing funds devoted to artificial intelligence investments was unraveling. In a matter of weeks, Leopold Aschenbrenner's Situational Awareness went from managing roughly $45 billion to being forced into
[6]
Leopold Aschenbrenner Built a Hot A.I. Hedge Fund. Then it Melted Down.
Rob Copeland, a finance reporter, is the author of a book on what was once the world's largest hedge fund. Last year, Leopold Aschenbrenner, a man barely of legal drinking age with a fondness for Rubik's Cubes, crisscrossed the nation to raise money for his high-flying hedge fund. An
[7]
5,000 investors still copy the AI trader who blew up
Leopold Aschenbrenner's AI hedge fund lost 67% in a single month. More than 5,000 small investors are still copying his stock picks anyway. The AI trade blew up its own poster child last month, and thousands of people decided to keep betting on him. More than 5,000 retail investors are still
[8]
We Are Experiencing a Situational Awareness Meltdown
Back in 2024, former OpenAI employee Leopold Aschenbrenner captured everyone's attention with a 135-page essay/manifesto mapping out the future of artificial intelligence. Then he put his money where his mouth was, starting an investment firm specifically to bet on where he saw the world moving.
[9]
How Leopold Aschenbrenner, the 'golden child' of the AI trade, was laid low
Leopold Aschenbrenner made his name on his ability to predict the future. But the trader dubbed the "Nostradamus of AI" would have been hard-pressed to foresee how quickly his high-flying hedge fund would run into trouble. The OpenAI alumnus, with no trading experience, had over two years become a
[10]
How Leopold Aschenbrenner built a $45 billion AI hedge fund -- and lost most of it in days
The crash marks a dramatic turn for Aschenbrenner, who launched the fund after gaining Silicon Valley fame with his 2024 AI manifesto, drawing scrutiny from critics over his lack of money management experience and past ties to FTX. Two years ago, Leopold Aschenbrenner argued he was one of few
[11]
A.I. Hedge Fund Situational Awareness Rescued by Rival Citadel
The once-high-flying firm Situational Awareness, whose founder is 24, has been bailed out by Kenneth Griffin's Citadel, according to three people briefed on the transaction. One of the hottest hedge funds in artificial intelligence received a bailout to stay afloat on Thursday amid a sudden drop
[12]
Leopold Aschenbrenner's AI fund lost most of its value. Now it's back with $400M.
Leopold Aschenbrenner's AI fund rode the infrastructure boom to spectacular gains, then lost most of its value in a single month. Now it is back with a $400m bet. One of the most talked-about funds in AI is wagering again, barely a week after it nearly blew up. Situational Awareness, the firm
[13]
Leopold Aschenbrenner's Situational Awareness seeks to raise capital after AI rout
Situational Awareness, the $20bn hedge fund founded by former OpenAI employee Leopold Aschenbrenner, has sought to raise fresh capital from investors after suffering heavy losses during the recent rout in AI stocks. The fund held discussions with existing investors and lenders in recent days
[14]
A Prominent AI Investor Is Now Crumbling, in What Could Be a Sign of Things to Come
Can't-miss innovations from the bleeding edge of science and tech Suddenly, things ain't looking great for the AI industry. Or at least for the people pouring loads of money into it. Situational Awareness, a much-hyped AI hedge-fund whose 24-year-old founder Leopold Aschenbrenner preached endless
[15]
The power couple of AI is getting married in Carmel, days after groom Leopold Aschenbrenner's hedge fund nearly blew up | Fortune
But the groom is set to tie the knot after having spent this entire week desperate to keep his fund afloat. The 20-something became known as the "Nostradamus" of AI after building his hedge fund, Situational Awareness, to $45 billion in capital on a concentrated bet on hot memory chip and data
[16]
Star AI investor Leopold Aschenbrenner is unwinding trades after steep losses, sources say
Aschenbrenner launched the fund after leaving OpenAI in 2024 and quickly became one of the most watched figures in AI investing because of eye-popping returns. The $24 billion hedge fund founded by former OpenAI researcher Leopold Aschenbrenner is unwinding many of its trades after big losses on
[17]
Aschenbrenner's Situational Awareness fund sells out to Citadel
Situational Awareness, the AI-focused hedge fund founded by former OpenAI researcher Leopold Aschenbrenner, has been forced to sell its entire portfolio of public stocks to Ken Griffin's Citadel after steep losses. A leveraged bet on AI infrastructure and against software collapsed on it from both
[18]
Citadel Buys Situational Awareness Stocks After July AI Market Rout: Reports
Situational Awareness retained about $10 billion in assets, including its Anthropic stake, after reportedly selling leveraged public stock positions to Ken Griffin's Citadel. Ken Griffin's Citadel reportedly bought a large proportion of the public stock portfolio of Situational Awareness, the
[19]
This 24-Year-Old Hedge Fund Prodigy Was Called the 'Nostradamus of AI' -- He Didn't See a 73% Drop Coming.
Leopold Aschenbrenner was once dubbed the "Nostradamus of AI" for a viral essay predicting a wave of transformative artificial intelligence. But his hedge fund didn't see its own meltdown coming. The 24-year-old former OpenAI researcher launched Situational Awareness in 2024 with $100 million from
[20]
AI Fund With Bitcoin Miner Bets Seeks Capital After Rout: FT
The FT said Situational Awareness had approached investors and lenders after borrowing amplified losses during July's AI stock sell-off. Situational Awareness, the hedge fund founded in 2024 by ex-OpenAI researcher Leopold Aschenbrenner, has approached investors and lenders for fresh capital after
[21]
AI bubble gone bust? Once a billionaire, how AI investor Leopold Aschenbrenner lost most of his hedge fund's fortune in days
Aschenbrenner's fund, Situational Awareness, massively grew to as big as $45 billion at the beginning of July before big losses took hold, CNBC reported citing sources. The fund began to see massive losses in recent weeks as its heavyweight AI holdings like SK Hynix sharply crashed, while its short
[22]
👀 Major AI Hedge Fund Melts Down As Fears Of Bubble Grow
Global hedge funds are grappling with their biggest monthly drawdown on record as AI stocks have been routed across the board. NEW YORK, July 30 (Reuters) - Situational Awareness, an AI-focused hedge fund run by former OpenAI researcher Leopold Aschenbrenner, sold the bulk of its stock portfolio
[23]
'Leopold Just Stopped Taking Calls': Inside the Week That Gutted Wall Street's Hottest AI Fund - Intel (N
On July 24, Leopold Aschenbrenner sent investors a letter touting returns of 439% for the year through June and 1,551% since inception. The selloff hammering his fund, he wrote, made it a "particularly good time to add funds." Six days later Situational Awareness had surrendered the bulk of its
[24]
How the quick fall from grace of a fund run by 'Nostradamus of AI' triggered a 24-hour race to salvage it
Leopold Aschenbrenner's hedge fund incurred significant losses and a forced sale of investments. Billionaire Ken Griffin's Citadel acquired these discounted technology holdings. The fund's assets plunged from forty-five billion to ten billion dollars. Aschenbrenner took responsibility for the
[25]
AI Wunderkind Leopold Aschenbrenner's $20 Billion AI Hedge Fund Is Raising Cash After AI Rout - NVIDIA (N
Leopold Aschenbrenner turned a viral essay about artificial intelligence into Situational Awareness, a $20 billion hedge fund that returned 439% net through June. This week, after losses in the AI selloff, he was asking his investors and lenders for more cash. He also offered some of them the
[26]
Ex-OpenAI employee's hedge fund Situational Awareness hit by AI stock rout; seeks fresh funding
Situational Awareness hedge fund is seeking new capital after significant losses. The fund experienced heavy declines as artificial intelligence stocks faced pressure. Its value dropped sharply over recent weeks due to market volatility. Several major holdings saw significant percentage decreases
[27]
'Nostradamus of AI' makes new $400M bet after Situational Awareness fund's near-collapse
The so-called "Nostradamus of AI," Leopold Aschenbrenner, has made a new $400 million bet on a private company - just days after the near-implosion of his hedge fund, according to a report. Aschenbrenner's firm, Situational Awareness, had poured $100 million into the same company last month,
[28]
Situational Awareness Meltdown Ends as Citadel Takes Over What Remains
The capitulation selling on Wednesday was apparently triggered by the meltdown in the Situational Awareness hedge fund that, according to the Financial Times, was up 439% in the first six months of 2026. The Wall Street Journal reported that Situational Awareness was down 67% in July. Due to excess
[29]
Tech bro's lavish wedding plans forced to make handbrake turn as $30 billion loss hits
AI prodigy Leopold Aschenbrenner's wedding weekend brought together a who's who of Silicon Valley money and influence for a multi-day celebration. But there was a big elephant in room: just days before, the 24-year-old's $45 billion hedge fund, Situational Awareness, had imploded, suffering losses
[30]
AI wizkid Leopold Aschenbrenner forced to sell entire portfolio after rout By Investing.com
Investing.com - Leopold Aschenbrenner's Situational Awareness LP hedge fund has sold its entire stock portfolio in one block trade after steep losses in the AI-focused portfolio, CNBC reported, citing people familiar with the matter. Ken Griffin's Citadel was said to be the buyer, the WSJ later
[31]
From AI star to forced seller: Aschenbrenner's rapid downfall
Leopold Aschenbrenner is now learning firsthand how quickly Wall Street can turn a celebrated manager into a symbol of speculative excess when the market regime shifts. The former OpenAI researcher, 25, had made Situational Awareness one of the most closely watched hedge funds of the moment thanks
[32]
Some investors saw warning signs before wunderkind's Situational Awareness fund nosedived: report
Situational Awareness -- the hedge fund that bet the farm on AI only to see key investments implode last month -- was backed by Wall Street and Silicon Valley big-wigs who began to see the writing on the wall before it blew up. Investing gurus jumped to back Leopold Aschenbrenner, a 24-year-old
[33]
Exclusive | Situational Awareness' prime brokers poised to keep backing Leopold Aschenbrenner in wake of selloff: sources
Reports of the demise of the "Nostradamus of AI," a.k.a. Leopold Aschenbrenner, may well be exaggerated, On The Money has learned. Just ask his prime brokers. That's the word from the Wall Street banks that perform this vital function for hedge funds - part of the same smart-money crowd caught
[34]
Tech bro's $45 billion AI fund collapses days before lavish California wedding
A 24-year-old Silicon Valley AI prodigy watched his $45 billion hedge fund implode just days before walking down the aisle for his lavish California wedding. Leopold Aschenbrenner, the founder of the AI-focused hedge fund Situational Awareness, was putting the finishing touches on his wedding in
[35]
'Nostradamus of AI' Leopold Aschenbrenner didn't have the crystal ball seeing hedge fund portfolio dip 67%
The celebrated crystal ball of the "Nostradamus of AI" hasn't merely gone cloudy -- it has rolled off the table and shattered on the parlor floor. Wall Street breathed a huge sigh of relief last week as an AI-focused hedge fund called Situational Awareness reportedly sold most of its portfolio --
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Leopold Aschenbrenner's Situational Awareness, an AI-focused hedge fund, crashed from $45 billion to $10 billion after AI infrastructure stocks plummeted over 30% in a month. The 25-year-old former OpenAI researcher sold most public holdings to Ken Griffin's Citadel but retained a $5 billion stake in Anthropic, which could offset losses when it goes public in October.
Former OpenAI Researcher's AI Hedge Fund Faces Historic Losses
Leopold Aschenbrenner's Situational Awareness, an AI hedge fund launched in 2024, sold the bulk of its public stock portfolio to Ken Griffin's Citadel after sustaining catastrophic losses that reduced its assets from approximately $45 billion to $10 billion
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. The 25-year-old former OpenAI researcher, who had no prior trading experience before launching the fund, saw his AI-driven investment strategy unravel as AI infrastructure stocks experienced their steepest decline in modern history1
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Source: New York Post
The fund had delivered a staggering 439% return through June, attracting prominent backers including Stripe co-founders Patrick and John Collison, Meta executives Daniel Gross and Nat Friedman, and quant-trading firm Jane Street
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. Aschenbrenner's investment thesis centered on his published essays arguing that scaling AI would require massive buildups in semiconductors, compute infrastructure, memory, and energy systems1
.Leveraged Bets on AI Infrastructure Trigger Margin Calls
Situational Awareness had constructed concentrated positions in AI infrastructure investments, holding significant stakes in companies like Nebius Group, Bloom Energy, SanDisk, CoreWeave, SharonAI, and IREN as of March 31
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. These AI tech holdings plummeted between 50% and 78% from recent peaks, with some falling more than 30% in a single month1
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.The fund's use of leverage—borrowing money to amplify returns—backfired spectacularly when the market turned against its positions. As the portfolio's value declined, prime brokers including Goldman Sachs, JPMorgan Chase, Bank of America, and Citigroup demanded additional collateral through margin calls
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. This triggered a deleveraging spiral where selling holdings to raise cash created further pressure on already-sliding stocks, generating additional losses5
.Unprecedented Momentum Reversal Compounds AI Stock Bets Losses
The hedge fund collapse occurred during what market technicians describe as the largest and fastest momentum crash in modern history. Morgan Stanley's sector-neutral Momentum Index tumbled 17.4% in just four trading days, surpassing reversals following the dot-com bust, pandemic shock, and 2022 inflation-driven bear market
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. The iShares MSCI USA Momentum Factor ETF, which posted its best month ever in April, is now on pace for its worst month5
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Source: Cointelegraph
Situational Awareness had built positions owning companies expected to supply AI infrastructure while simultaneously betting against software firms viewed as vulnerable to AI disruption. When software stocks like Adobe rallied instead of declining, the fund lost money on both its long and short positions simultaneously, eliminating the protection its hedges were supposed to provide
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.Citadel Steps In as AI Infrastructure Stocks Face Scrutiny
Citadel's acquisition fits a familiar pattern for Ken Griffin's $71 billion hedge fund, which has a reputation for stepping in to purchase attractive assets when leveraged players must unwind positions
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. Citadel's portfolio already featured some of the same AI infrastructure stocks, suggesting Griffin expects the sector to recover and has the financial capacity to wait out the volatility1
.As part of the deal, Citadel picked up the portion of Situational Awareness's public portfolio that was financed by leverage from brokers
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. The fund was under pressure to either raise fresh capital from investors or offload its entire book, ultimately choosing the latter option4
.Related Stories
Anthropic Stake Offers Potential Lifeline for Situational Awareness
Despite selling its public stock portfolio, Situational Awareness retained its private investments, most notably a stake in Anthropic currently valued at $5 billion
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. Anthropic was last valued at $965 billion in a Series H round in May and is expected to go public as soon as October, potentially at an even higher valuation1
. A windfall from selling those shares could conceivably offset some of the fund's public-market losses1
.Other private investments in the portfolio include chipmaker MatX and AI data center startup Fluidstack, which was reportedly in talks in April to raise a new round at an $18 billion valuation
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. After the Citadel transaction, Situational Awareness will hold a book of roughly $10 billion comprised of stocks and these private investments4
.Market Questions Whether AI Infrastructure Selloff Signals Fundamental Shift
The Financial Times noted that while Aschenbrenner thought AI-related stocks would continue rising, "they went the other way." The publication observed that "he'd funded his trades with debt, this quickly turned into a liquidity crisis"
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. Even as Aschenbrenner claims the fund remains 80% up for the year, the episode demonstrates how an investor can be directionally right about long-term trends while still facing a market selloff driven by timing and leverage decisions3
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Source: Market Screener
Public investors grew concerned that massive capital expenditures in AI infrastructure weren't translating into near-term revenue, triggering the broader decline in AI infrastructure stocks
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. Michael Burry of "The Big Short" fame used Thursday's rebound to add bearish positions in Micron, the VanEck Semiconductor ETF, and Nvidia put options, questioning whether the AI trade still has staying power5
. However, AI infrastructure stocks rebounded sharply as investors increasingly interpreted the volatility as a technical dislocation rather than a deterioration in the industry's fundamentals5
.References
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