Situational Awareness, the hedge fund run by Leopold Aschenbrenner, has sold the bulk of its public stock portfolio to Ken Griffin’s Citadel after taking heavy losses in the last month. The Wall Street Journal broke the story on Thursday.
It is a significant drop for a young manager described as both “scarily smart” and “brash.”
Aschenbrenner is 25 years old and German-born. He had no experience in trading before launching the fund in 2024. He became well known for his investment thesis, which argued that scaling artificial intelligence would require a major build-up in semiconductors, compute, memory, and energy infrastructure.
He joined OpenAI’s “superalignment” team in 2023. He graduated as valedictorian from Columbia at 19, having enrolled at age 15. He left the company a year later over what OpenAI described as an improper disclosure of internal information. At the time, the team was led by OpenAI co-founder Ilya Sutskever and AI researcher Jan Leike. Sutskever soon left to start his own company. Leike joined rival Anthropic. Aschenbrenner launched his fund shortly after.
The fund returned 439% for the year through June, the Financial Times reported. Assets under management reportedly grew to as much as $45 billion during their peak. The fund’s positions began dropping sharply amid a broader decline in AI infrastructure investments, CNBC reported.
Even after losses mounted, Aschenbrenner did not flinch. In a July 24 letter to investors seen by the FT, he called the selloff one of the best buying opportunities since early last year. He invited clients to commit fresh capital starting August 1. Bloomberg reported that the appeal did not garner the commitments he hoped would materialise.
Some of the hardest-hit stocks held by the fund included memory chip producers SK Hynix and Sandisk, clean energy developer Bloom Energy, and neocloud provider Nebius Group. All of these have plummeted by more than 30% over the past month. AI infrastructure equities fell as public investors grew concerned that massive capital expenditures were not translating into near-term revenue. The fund’s losses were amplified by leverage, a common hedge fund strategy of using borrowed money to buy stocks.
After Citadel bought the bulk of those holdings, Situational Awareness’ overall assets fell to roughly $10 billion, Bloomberg reported. This is down from around $20 billion in recent months, per an earlier WSJ report.
Situational Awareness raised several hundred million dollars at its outset. Early backers of the fund include quant-trading firm Jane Street, Stripe co-founders Patrick and John Collison, and Meta executives Daniel Gross and Nat Friedman.
Citadel’s purchase fits a familiar pattern for Ken Griffin’s hedge fund. It has a reputation for stepping in to snap up attractive assets when leveraged players are having to unwind themselves. Even before picking up some of Situational Awareness’ holdings, Citadel’s portfolio featured some of the same AI infrastructure bets. This suggests that, like Aschenbrenner, Griffin expects the sector to recover and has the ability to wait it out.
Private stakes remain
Situational Awareness did not, however, sell its investments in private companies, according to multiple reports. Most notably, it continues to hold a stake in Anthropic that is right now valued at $5 billion, according to Bloomberg. Many would view this as an asset that continues to appreciate.
Anthropic was last valued at $965 billion in a Series H round in May. It is expected to go public as soon as October, potentially at an even higher valuation. A windfall from the sale of those shares could offset some of the hedge fund’s public-market losses.
Other private investments in the portfolio of Situational Awareness include chipmaker MatX and AI data center startup Fluidstack. Fluidstack was reportedly in talks in April to raise a new round at an $18 billion valuation.
TechCrunch has reached out to Aschenbrenner for comment.
