Situational Awareness, an AI-focused hedge fund founded by former OpenAI researcher Leopold Aschenbrenner in 2024, sold the bulk of its public equities portfolio to Ken Griffin's Citadel on July 30, 2026, after suffering heavy losses on AI stocks earlier that month [1, 2, 3, 4, 5].

The fund was down roughly 67% in July amid a selloff in AI sector shares. Before the sale, Situational held significant stakes in technology companies including Broadcom, Intel, and CoreWeave [1, 2]. Situational had managed about $20 billion in assets prior to the deal but retained approximately $10 billion in stocks and private investments afterwards [1, 2, 4, 5]. The hedge fund kept its private investment in Anthropic and did not include it in the sale [1, 2, 5].

Citadel purchased the portion of the portfolio that was financed through leverage from prime brokers such as Goldman Sachs, JPMorgan, Bank of America, and Citigroup, who all facilitated the transaction [1, 2]. Citadel, one of the largest hedge funds with $71 billion under management, acquired these assets at significantly lower prices, according to market strategists[S1,S2,S5].

Situational Awareness initially gained about 439% returns from January through June 2026 before its sharp July losses [1, 2]. Leopold Aschenbrenner, who had no prior professional investing experience, is known for a 2024 essay on AI’s future and founded the fund with a focus on AI-driven investments [3, 4, 5].

Market observers noted the concentrated risk of the fund’s AI bets. Michael Dempsey, managing partner at Compound, said Situational Awareness’s early success was "incredibly impressive" but added, "anyone who has experience in public markets could somewhat easily see this was One Big Trade and so probably there should have been way better views on risk besides buying index-level puts" [5]. Shay Boloor, chief market strategist at Futurum Equities, described Citadel’s timing as "absolutely ruthless," pointing to reports that Citadel anticipated the forced sell-off and bought assets near the lows [5].

The transaction closed on July 30, 2026, marking a major retrenchment for Situational Awareness after its rapid rise and fall in the AI investment space [1, 2, 3, 4, 5].