AI Hedge Fund 'Situational Awareness' Suffers Massive Losses
Leopold Aschenbrenner's 24-year-old founder hedge fund lost $35 billion after AI stocks plunged, selling most of its public portfolio to Citadel.
The hedge fund 'Situational Awareness,' founded by Leopold Aschenbrenner, a former OpenAI employee, has incurred heavy losses after several bad weeks for AI stocks. The fund was worth $45 billion at the start of July but now stands at $10 billion after selling assets to Ken Griffin's Citadel. This loss is three times larger than the record $8 billion loss of Archegos Capital Management in 2021.
The fund had only eight employees, four of whom were investment professionals. Its largest holdings at the end of the first quarter included Nebius Group, Sandisk, Micron, and CoreWeave, all down more than 35% in the month.
Aschenbrenner, 24, was hailed as an economics prodigy at age 17 by Tyler Cowen. He graduated as valedictorian from Columbia University at 19, worked at the FTX Future Fund, and then at OpenAI's superalignment team, from which he was fired for leaking internal information. The fund is named after his essays on AI, predicting superintelligence by 2027.
Backers included Patrick and John Collison (Stripe co-founders), Meta AI leaders Daniel Gross and Nat Friedman, and Jane Street. The fund used leveraged bets, at one point up 439%, but margin calls forced the sale after AI stocks dropped. The fund still holds private investments, including $5 billion in Anthropic, which may also be sold.
