AI Hedge Fund Situational Awareness May Have Sold Its Public Portfolio, but It Still Holds Anthropic Shares

Situational Awareness, a hedge fund founded 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 on Thursday. The move marks a significant comedown for the rising star, who has been described as both “scarily smart” and “brash.” German-born Aschenbrenner, now 25, had no prior trading experience before launching the fund in 2024. He gained prominence for his investment thesis, which argued that scaling AI would require a massive build-up in semiconductors, compute, memory, and energy infrastructure. His predictions attracted significant attention and capital, but recent market turbulence exposed vulnerabilities in his strategy. Aschenbrenner joined OpenAI’s “superalignment” team in 2023, two years after graduating as valedictorian from Columbia University at 19 (he enrolled at age 15). He was dismissed from the company a year later over what OpenAI 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 hedge fund. Things couldn’t have been going better for Situational Awareness until recently. The fund returned 439% for the year through June, according to the Financial Times. Assets under management reportedly grew to as much as $45 billion at their peak before the fund’s positions began dropping sharply amid a broader decline in AI infrastructure investments, CNBC reported in July 2026. Even after losses mounted, Aschenbrenner remained resolute. In a July 24 letter to investors seen by the Financial Times, he called the selloff one of the best buying opportunities since early 2025 and invited clients to commit fresh capital starting August 1. According to Bloomberg, the appeal did not garner the commitments he had hoped for. 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 fell by more than 30% over the past month. AI infrastructure equities declined as public investors grew concerned that massive capital expenditures were not translating into near-term revenue. The fund’s losses were amplified by leverage, a common hedge fund strategy of using borrowed money to amplify returns. After Citadel bought the bulk of those holdings, Situational Awareness’s overall assets fell to roughly $10 billion, Bloomberg reported, down from around $20 billion at the start of 2026. Despite the sale of its public portfolio, the fund retains its stake in Anthropic, the AI company where former OpenAI safety lead Jan Leike now works. These shares, acquired in earlier private placements, are not publicly traded and may offer a hedge against the recent downturn, depending on Anthropic’s valuation and future funding rounds. The selloff highlights the volatility of AI-focused investment strategies, even for funds with strong initial returns. As of late July 2026, Situational Awareness continues to hold its Anthropic position, suggesting Aschenbrenner still sees value in the AI sector, albeit through private rather than public markets.

via TechCrunch AI