AI Hedge Fund Situational Awareness Collapses After Margin Calls
Situational Awareness, the AI-focused hedge fund founded by Leopold Aschenbrenner, has collapsed after losing approximately $35 billion in assets due to margin calls from its prime brokers. The distressed sale of publicly traded holdings was reportedly acquired at below-market prices by Citadel, led by Ken Griffin. These included positions in SK Hynix and CoreWeave. The fund had leveraged up to 400% on bullish bets for AI infrastructure names while also taking bearish wagers against software companies like Adobe — both of which went wrong as key holdings dropped over 35%. Before the collapse, Situational Awareness saw a more than 1,000% return since its July 2024 launch. The fund's portfolio was largely public equity with significant private investments in Anthropic. Aschenbrenner’s thesis centered on AI-driven demand for semiconductors and infrastructure — an idea he outlined in a widely shared essay after leaving OpenAI. His early backers included prominent figures like Stripe co-founders Patrick and John Collison.
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