Leopold Aschenbrenner made his name on his ability to predict the future. The German-born investor became well known in Silicon Valley in 2024 after writing an essay titled \u201cSituational Awareness\u201d that detailed how he expected AI to dramatically reshape society in the coming years.<\/sup> The 24-year-old wunderkind and former OpenAI researcher left in 2024 to found Situational Awareness LP \u2014 a hedge fund focused on AI infrastructure.<\/sup><\/p>\n\n\n\n Aschenbrenner capitalised on his newfound popularity by raising money for a hedge fund, with anchor investments from former GitHub chief executive Nat Friedman and Patrick and John Collison, who founded Stripe.<\/sup> The OpenAI alumnus, with no trading experience, had over two years become a Wall Street sensation, racking up gains of over 400 per cent for his more than $20bn hedge fund Situational Awareness in the first six months of this year alone.<\/sup> According to the Financial Times, the fund generated a return of about 439% by the end of June.<\/sup> Situational Awareness’s assets snowballed to $24bn, as Aschenbrenner poured money into bets on the winners of the AI trade.<\/sup><\/p>\n\n\n\n Former OpenAI researcher Leopold Aschenbrenner’s hedge fund lost approximately 67 percent in July.<\/sup> By July some of the hedge fund’s biggest stock positions, according to its last regulatory filings, appeared to be collapsing. The fund \u2014 run by seven investment professionals and 20 employees \u2014 at one point held hundreds of millions of dollars in Bloom Energy and Sandisk, which had fallen about 40 per cent since the end of June to the start of this week.<\/sup><\/p>\n\n\n\n At least one prime broker put Situational Awareness on a \u201cwatch list\u201d due to the highly volatile and concentrated nature of its bets on AI stocks. The prime broker called for additional margin to support its positions several times over the past year, according to an executive at the bank, including this week.<\/sup> The firm, however, was said to have been using substantial leverage to amplify returns, leaving it exposed when AI and technology shares came under pressure.<\/sup><\/p>\n\n\n\n Only a week before the sale, Aschenbrenner was treating the technology decline as a buying opportunity. In a July 24 letter, he reportedly told investors the selloff had created some of the most attractive entry points since early 2025 and offered them the chance to contribute more capital beginning August 1.<\/sup><\/sup><\/sup><\/p>\n\n\n\n As tech stocks continue<\/sup>d to<\/sup> fall further, investors complained that they could not get through to Aschenbrenner’s fund. \u201cLeopold just stopped taking calls,\u201d said one investor in the fund.<\/sup><\/sup><\/p>\n\n\n\n A drumbeat of pressure from the fund’s bankers, and efforts to rapidly sell chunks of its portfolio, culminated late Wednesday night when Aschenbrenner got on the phone with Citadel’s Ken Griffin<\/sup>.<\/sup> Ken Griffin’s Citadel has swooped in to buy a large portion of hedge fund Situational Awareness’ $16bn public equity holdings after Leopold Aschenbrenner’s investment firm was wrongfooted in the AI sell-off.<\/sup><\/sup><\/p>\n\n\n\n The 24-year-old wunde<\/sup>rkind and one of Wall Street’s most feared investors hammered out a deal to sell much of Situational Awareness’s portfolio to Griffin’s hedge fund. Citadel’s swoop for the bulk of Situational Awareness’s public stock holdings, which were once estimated at $16bn, beat out rivals Millennium Management and Jane Street and marks one of the largest and most sudden stock transactions in Wall Street history.<\/sup><\/sup><\/sup><\/p>\n\n\n\n \u201cWe let you down this month,\u201d Aschenbrenner wrote in a letter to investors. He took \u201cfull responsibility\u201d and said Situational Awareness, the fun<\/sup>d he launched in 2024, would stop borrowing from banks to amplify its public market bets, though it will continue investing in sto<\/sup>cks.<\/sup><\/p>\n\n\n\n Situational Awareness was left with a small slice of unlevered public stock holdings and its private stakes, according to two people familiar with the matter.<\/sup> Despite recent losses, the hedge fund reportedly continues to hold private investments, including an estimated $5 billion stake in Anthropic, accor<\/sup>ding to Bloomberg.<\/sup> Multiple investors said Aschenbrenner was exploring a sale of some or all of his coveted Anthropic stake, though at a premium to its last valuation of $900bn.<\/sup><\/sup><\/sup><\/p>\n\n\n\n Industry reports suggest he invested much of his own capital into Situational Awareness LP, where he serves as the general partner alongside Carl Shulman.<\/sup> One person close to the firm said it \u201cwasn’t over\u201d.<\/sup><\/sup><\/sup><\/p>\n\n\n\n Sources Quoted: <\/p>\n\n\n\n Financial Times, Ynetnews, Hindustan Times, Inc. Magazine, Seeking Alpha, BitMEX Blog.<\/p>\n","protected":false},"excerpt":{"rendered":" Former OpenAI researcher Leopold Aschenbrenner’s $24bn hedge fund Situational Awareness sells the bulk of its $16bn public equity portfolio to Ken Griffin’s Citadel after a 67% July loss.<\/p>\n","protected":false},"author":1,"featured_media":1223,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[398],"class_list":["post-1222","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-trending-now","tag-leopold-aschenbrenner"],"yoast_head":"\nThe July Crash and Forced Deleveraging<\/h2>\n\n\n\n
Citadel and Ken Griffin Swoop In<\/sup><\/sup><\/h2>\n\n\n\n
The Private Holdings and Future Outlook<\/sup><\/sup><\/h2>\n\n\n\n
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