24-Year-Old Hedge Fund 'Situational Awareness' Loses $35 Billion in AI Bets
A young hedge fund named Situational Awareness, founded by a former OpenAI employee and focused on artificial intelligence investments, has reportedly lost over $35 billion since the start of July. The firm sold most or all of its public stock portfolio to Citadel's Ken Griffin amid declining AI-related stocks. At one point valued at $45 billion, it is now worth just $10 billion. The fund’s collapse follows a broader market concern about overvaluation in AI companies and has drawn comparisons to the 2021 Archegos Capital Management blowup, which lost $8 billion in ten days. Situational Awareness had only eight employees, with four involved in investments, yet made large bets on stocks like Nebius Group, Sandisk, Micron, and CoreWeave—all of which dropped more than 35% this month. The fund was founded by Leopold Aschenbrenner, a 24-year-old who authored speculative essays predicting the arrival of artificial general intelligence (AGI) in 2027. The collapse highlights risks associated with high-risk AI investing and has sparked scrutiny over inexperienced management making large financial bets.
Topics: AI investing hedge fund failure market losses young entrepreneurs