Situational Awareness, a hedge fund founded in 2024 by former OpenAI researcher Leopold Aschenbrenner, sold the majority of its public AI-related stock holdings to Ken Griffin's Citadel hedge fund in late July 2026 amid sharp declines in AI stock prices [1, 2, 3].
The fund, which at its peak managed around 45 billion USD in assets, has seen its assets drop to roughly 10-20 billion USD after the selloff [1, 3]. This steep decline followed losses driven by a broad collapse in AI infrastructure stocks including SK Hynix, SanDisk, Bloom Energy, and Nebius Group, all of which dropped over 30% in late July 2026 [1]. The Taiwan stock market fell by 1564.18 points or 3.76% on July 29, compounding the pressure on related holdings [4, 3].
Situational Awareness used leverage to amplify returns, which helped generate a 439% return in the year through June 2026 but also compounded losses during the downturn [5, 1, 4, 3]. The fund was forced to deleverage amid margin pressure and rapid declines in AI stocks [1, 4, 3]. Despite the selloff, Situational Awareness still retains some public stock positions and equity interests in private AI firms like Anthropic [1, 2, 3].
Leopold Aschenbrenner, dismissed from OpenAI in 2024 for improper disclosure of internal information, founded Situational Awareness later that year [1]. On July 24, 2026, he sent a letter to investors calling the recent AI stock selloff "one of the best buying opportunities since early last year" and invited new capital starting August 1 [1]. The fund has been actively seeking new funding from existing investors and lenders to stabilize its position [5, 4].
