AI hedge fund Situational Awareness may have sold its public portfolio, but it still has its Anthropic shares
The former OpenAI researcher’s fund was forced to unwind public equities after leveraged public bets plummeted. But he still has cards to play.
Situational Awareness, a hedge fund formed by former OpenAI researcher Leopold Aschenbrenner, has sold the majority of its public stock portfolio to Ken Griffin’s Citadel following steep losses over the past month, The Wall Street Journal reported earlier on Thursday. It’s a big comedown for the rising star who has been described as both “scarily smart,” and “brash.”
German-born Aschenbrenner, who is 25, had no prior trading experience before launching the fund in 2024. He gained prominence for his investment thesis after publishing essays arguing that scaling AI would require a major build-up in semiconductors, compute, memory, and energy infrastructure.
He joined OpenAI’s “superalignment” team in 2023, two years after graduating as valedictorian from Columbia at 19 (he enrolled at age 15). But he was dismissed from the company a year later over what it described as an improper disclosure of internal information. At the time, that team was led by OpenAI co-founder Ilya Sutskever and AI researcher Jan Leike. Soon after, Sutskever left to start his own company , Leike joined rival Anthropic, and Aschenbrenner launched his fund.
Things couldn’t have been going better for Situational Awareness until very recently. The fund returned 439% for the year through June, Financial Times reported. Assets under management reportedly grew to as much as $45 billion during their peak before the fund’s positions began dropping sharply amid a broader decline in AI infrastructure investments, CNBC reported.
Even after losses mounted, Aschenbrenner didn’t flinch. In a July 24 letter to investors seen by FT , he called the selloff one of the best buying opportunities since early last year and invited clients to commit fresh capital starting August 1. According to Bloomberg, the appeal didn’t garner the commitments he’d hoped would materialize.
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 which have plummeted by more than 30% over the past month. AI infrastructure equities fell as public investors grew concerned that massive capital expenditures weren’t 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, 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 Citadel. Ken Griffin’s hedge fund 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 , suggesting that, like Aschenbrenner, Griffin expects the sector to recover and has the ability to wait it out.
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’s right now valued at $5 billion, according to Bloomberg, and which many would view as an asset that continues to appreciate. Indeed, Anthropic was last valued at $965 billion in a Series H round in May, and it’s expected to go public as soon as October , potentially at an even higher valuation . It’s conceivable that 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, which was reportedly in talks in April to raise a new round at an $18 billion valuation .
TechCrunch has reached out to Aschenbrenner for comment.
When you purchase through links in our articles, we may earn a small commission . This doesn’t affect our editorial independence.
Marina Temkin is a venture capital and startups reporter at TechCrunch. Prior to joining TechCrunch, she wrote about VC for PitchBook and Venture Capital Journal. Earlier in her career, Marina was a financial analyst and earned a CFA charterholder designation.
You can contact or verify outreach from Marina by emailing marina.temkin@techcrunch.com or via encrypted message at +1 347-683-3909 on Signal.
Scale faster. Grow your portfolio. Gain practical expertise. No matter your goal, Disrupt can empower you. Save up to $330 toda y!
Claude Opus 5 became downright ruthless when tasked with running a vending machine Julie Bort
Claude Opus 5 became downright ruthless when tasked with running a vending machine
Claude Opus 5 became downright ruthless when tasked with running a vending machine
Sam Altman is ready to decelerate Tim Fernholz
PSA: Your Claude shared chats and Artifacts may have ended up on Google Lorenzo Franceschi-Bicchierai
PSA: Your Claude shared chats and Artifacts may have ended up on Google
PSA: Your Claude shared chats and Artifacts may have ended up on Google
Librarians are hosting viral ‘Avoiding AI’ workshops for people who are fed up with Big Tech Amanda Silberling
Librarians are hosting viral ‘Avoiding AI’ workshops for people who are fed up with Big Tech
Librarians are hosting viral ‘Avoiding AI’ workshops for people who are fed up with Big Tech
SpaceX launches new V3 Starlink satellites but suffers another booster failure Sean O'Kane
SpaceX launches new V3 Starlink satellites but suffers another booster failure
SpaceX launches new V3 Starlink satellites but suffers another booster failure
Prentis, new AI lab co-founded by Reid Hoffman, Mark Pincus in talks to raise $100M Marina Temkin
Prentis, new AI lab co-founded by Reid Hoffman, Mark Pincus in talks to raise $100M
Prentis, new AI lab co-founded by Reid Hoffman, Mark Pincus in talks to raise $100M
US accuses American of allegedly wiping his phone using a ‘duress’ password during border search Zack Whittaker
US accuses American of allegedly wiping his phone using a ‘duress’ password during border search
US accuses American of allegedly wiping his phone using a ‘duress’ password during border search
Key takeaways
- The sale of public assets by the fund reflects the volatility of the technology and AI market, impacting risk perception among Brazilian investors.
- Aschenbrenner's trajectory serves as a warning about the importance of solid financial management in an emerging market.
- The retention of Anthropic shares suggests a long-term strategy that may resonate with investors who believe in the sector's recovery.
Editorial analysis
The situation of the Situational Awareness fund, led by Leopold Aschenbrenner, highlights the volatility of the technology and AI investment market, especially at a time when Brazil is striving to establish itself as a tech innovation hub. The sale of public assets after significant losses serves as a warning sign for investors betting on emerging sectors like AI infrastructure. This dynamic may influence the risk perception among Brazilian investors, who could become more cautious about technology investments, particularly in a scenario where AI infrastructure is still under development.
Moreover, Aschenbrenner's trajectory, from a promising OpenAI researcher to a struggling fund manager, illustrates the challenges faced by newcomers in the financial market. For Brazil, where the startup and technology ecosystem is growing, Aschenbrenner's story may serve as a cautionary tale about the importance of solid financial management and a deep understanding of markets before making significant bets.
The fact that the fund still holds shares in Anthropic suggests that Aschenbrenner may be betting on a more promising future for AI, even amid losses. This could indicate a long-term strategy that may resonate with investors who believe in the sector's recovery. For Brazil, where AI is becoming a priority across various industries, the ability to identify and invest in emerging technologies will be crucial for future success.
Finally, the current situation of the fund may lead to a reassessment of expectations regarding returns on AI investments. As companies seek to balance infrastructure spending with revenue generation, the Brazilian market may witness a similar movement, where investors and startups need to align their expectations with market realities, avoiding the trap of overvaluation that often accompanies rising sectors.
What this coverage includes
- Clear source attribution and link to the original publication.
- Editorial framing about relevance, impact, and likely next developments.
- Review for readability, context, and duplication before publication.
Original source:
TechCrunch AIAbout this article
This article was curated and published by AIDaily as part of our editorial coverage of artificial intelligence developments. The content is based on the original source cited below, enriched with editorial context and analysis. Automated tools may assist with translation and initial structuring, but publication decisions, factual review, and contextual framing remain editorial responsibilities.
Learn more about our editorial process