- Published on
AI hedge fund Situational Awareness may have sold its public portfolio, but it still has its Anthropic shares
- Authors
- Name
- DeepHorus
Leopold Aschenbrenner's AI-focused hedge fund, Situational Awareness, has sold the majority of its public stock portfolio to Ken Griffin's Citadel following steep losses over the past month, according to a Wall Street Journal report on Thursday. The move marks a significant setback for the 25-year-old former OpenAI researcher, who had no prior trading experience before launching the fund in 2024. Aschenbrenner gained prominence for his investment thesis that scaling artificial intelligence would require massive infrastructure in semiconductors, compute, memory, and energy. He was dismissed from OpenAI in 2023 after an improper disclosure of internal information, shortly before launching his fund.
The fund enjoyed spectacular early success, returning 439% for the year through June, as reported by the Financial Times. At its peak, assets under management reportedly reached $45 billion, per CNBC. However, a broad decline in AI infrastructure investmentsādriven by investor concerns that massive capital expenditures were not translating into near-term revenueāhit the fund hard. Hardest-hit stocks included memory chip producers SK Hynix and Sandisk, clean energy developer Bloom Energy, and neocloud provider Nebius Group, all plummeting over 30% in the past month.
Despite mounting losses, Aschenbrenner remained bullish, calling the selloff "one of the best buying opportunities since early last year" in a July 24 letter to investors, as reported by FT. He invited clients to commit fresh capital starting August 1, but the appeal failed to generate the expected commitments, according to Bloomberg. The fund's losses were amplified by leverage, a common hedge fund strategy of borrowing money to buy stocks. After Citadel purchased the bulk of its holdings, Situational Awareness's overall assets fell to roughly $10 billion, down from around $20 billion in recent months.
Citadel's purchase fits a familiar pattern for Ken Griffin's hedge fund, which has a reputation for acquiring attractive assets when leveraged players are forced to unwind. Citadel already had similar AI infrastructure bets in its portfolio, suggesting Griffin shares Aschenbrenner's belief that the sector will recover. Early backers of Situational Awareness include quant-trading firm Jane Street, Stripe co-founders Patrick and John Collison, and Meta executives Daniel Gross and Nat Friedman.
Importantly, Situational Awareness did not sell its investments in private companies, according to multiple reports. The fund continues to hold a stake in Anthropic valued at $5 billion, as reported by Bloomberg. 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 valuation. A windfall from those shares could offset some of the hedge fund's public-market losses.
Other private investments in the portfolio include chipmaker MatX and AI data center startup Fluidstack, which was reportedly in talks for a major funding round. While the public portfolio fire sale represents a humbling turn for Aschenbrenner, his retained private holdings could prove lucrative if AI sector valuations continue to rise. The fund's future now hinges on the performance of these unlisted assets and the timing of Anthropic's anticipated initial public offering.
Overall, the events underscore the volatile nature of concentrated AI infrastructure bets and the risks of leverage in hedge fund strategies. Aschenbrenner's journey from OpenAI prodigy to hedge fund manager has been marked by both extraordinary gains and sudden reversals. As the AI landscape evolves, Situational Awareness's ability to recover from these losses will depend on its private holdings and broader market conditions.
