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AI Stock Guru Says His Fund Will Never Use Leverage Again

2026-07-31·newswire-us-stock-232940
AI Stock Guru Says His Fund Will Never Use Leverage Again.

Leopold Aschenbrenner, a prominent figure in the global technology sector’s “Black July,” has drawn intense attention from investors after his Situational Awareness fund suffered heavy losses on leveraged bets on artificial-intelligence stocks.

According to earlier reports, the AI-focused hedge fund faced the risk of forced liquidation after trading stocks with borrowed money. This week, it sold most of its stock portfolio to Citadel, the investment firm founded by Ken Griffin, often described as the leading figure in the hedge-fund industry.

Unlike South Korean investors who have already been forced out of their positions, Aschenbrenner still has capital with which to try to recover. On Thursday evening local time, as capital markets focused on the AI stock guru’s heavy losses, Aschenbrenner sent a new letter to the fund’s investors.

He said he accepted full responsibility for the event in which the fund’s assets plunged 67% in July and said it would be his mission to ensure that the fund learned the necessary lessons from the experience. More importantly, Aschenbrenner pledged that the fund would continue operating and would not withdraw from the public stock market.

“Over the past two years, despite several periods of sharp drawdowns, we have achieved an excellent track record,” he wrote.

“However, our fund must always maintain a structure that allows it to regroup and fight another day, even after suffering losses.” Aschenbrenner also promised that Situational Awareness would never again borrow money from banks to leverage its stock trading. Filings that Situational Awareness submitted to the U.S.

Securities and Exchange Commission show that the fund held slightly more than $200 million in U.S. stocks at the end of 2024. That figure rose to $5.5 billion at the end of 2025 and reached $13.7 billion at the end of March this year.

In addition to successful bets on major winners such as SanDisk and Bloom Energy, the rapid growth in assets under management was driven by aggressive bets using leverage of several times the fund’s capital. Under the reporting schedule, U.S. stock funds must file reports of their holdings as of June 30 by mid-August.

Those filings will show the fund’s position shortly before the onset of “Black July.” The letter did not disclose the fund’s latest assets under management. Many early investors remain subject to lockup agreements, meaning they may not be able to redeem their money until September at the earliest.

Aschenbrenner said only that, despite the July losses, the fund’s year-to-date return was still 80%. Market rumors have claimed that the fund’s assets under management reached as much as $45 billion in early July.

After it was forced this week to sell leveraged stock positions to Citadel at a discount, its remaining holdings reportedly fell to about $10 billion, a figure that broadly fits with the 80% return. A considerable portion of those holdings consists of equity in AI company Anthropic.

People familiar with the matter said Aschenbrenner and Avital Balvit, chief of staff to Anthropic Chief Executive Officer Dario Amodei, are scheduled to marry this weekend. The couple confirmed their engagement last year.

#Stocks #AI

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AI Stock Guru Says His Fund Will Never Use Leverage Again

Leopold Aschenbrenner, a prominent figure in the global technology sector’s “Black July,” has drawn intense attention from investors after his Situational Awareness fund suffered heavy losses on leveraged bets on artificial-intelligence stocks. According to earlier reports, the AI-focused hedge fund faced the risk of forced liquidation after trading stocks with borrowed money. This week, it sold most of its stock portfolio to Citadel, the investment firm founded by Ken Griffin, often described as the leading figure in the hedge-fund industry. Unlike South Korean investors who have already been forced out of their positions, Aschenbrenner still has capital with which to try to recover. On Thursday evening local time, as capital markets focused on the AI stock guru’s heavy losses, Aschenbrenner sent a new letter to the fund’s investors. He said he accepted full responsibility for the event in which the fund’s assets plunged 67% in July and said it would be his mission to ensure that the fund learned the necessary lessons from the experience. More importantly, Aschenbrenner pledged that the fund would continue operating and would not withdraw from the public stock market. “Over the past two years, despite several periods of sharp drawdowns, we have achieved an excellent track record,” he wrote. “However, our fund must always maintain a structure that allows it to regroup and fight another day, even after suffering losses.” Aschenbrenner also promised that Situational Awareness would never again borrow money from banks to leverage its stock trading. Filings that Situational Awareness submitted to the U.S. Securities and Exchange Commission show that the fund held slightly more than $200 million in U.S. stocks at the end of 2024. That figure rose to $5.5 billion at the end of 2025 and reached $13.7 billion at the end of March this year. In addition to successful bets on major winners such as SanDisk and Bloom Energy, the rapid growth in assets under management was driven by aggressive bets using leverage of several times the fund’s capital. Under the reporting schedule, U.S. stock funds must file reports of their holdings as of June 30 by mid-August. Those filings will show the fund’s position shortly before the onset of “Black July.” The letter did not disclose the fund’s latest assets under management. Many early investors remain subject to lockup agreements, meaning they may not be able to redeem their money until September at the earliest. Aschenbrenner said only that, despite the July losses, the fund’s year-to-date return was still 80%. Market rumors have claimed that the fund’s assets under management reached as much as $45 billion in early July. After it was forced this week to sell leveraged stock positions to Citadel at a discount, its remaining holdings reportedly fell to about $10 billion, a figure that broadly fits with the 80% return. A considerable portion of those holdings consists of equity in AI company Anthropic. People familiar with the matter said Aschenbrenner and Avital Balvit, chief of staff to Anthropic Chief Executive Officer Dario Amodei, are scheduled to marry this weekend. The couple confirmed their engagement last year.

Leopold Aschenbrenner, a prominent figure in the global technology sector’s “Black July,” has drawn intense attention from investors after his Situational Awareness fund suffered heavy losses on leveraged bets on artificial-intelligence stocks.

According to earlier reports, the AI-focused hedge fund faced the risk of forced liquidation after trading stocks with borrowed money. This week, it sold most of its stock portfolio to Citadel, the investment firm founded by Ken Griffin, often described as the leading figure in the hedge-fund industry.

Unlike South Korean investors who have already been forced out of their positions, Aschenbrenner still has capital with which to try to recover.

On Thursday evening local time, as capital markets focused on the AI stock guru’s heavy losses, Aschenbrenner sent a new letter to the fund’s investors. He said he accepted full responsibility for the event in which the fund’s assets plunged 67% in July and said it would be his mission to ensure that the fund learned the necessary lessons from the experience.

More importantly, Aschenbrenner pledged that the fund would continue operating and would not withdraw from the public stock market.

“Over the past two years, despite several periods of sharp drawdowns, we have achieved an excellent track record,” he wrote. “However, our fund must always maintain a structure that allows it to regroup and fight another day, even after suffering losses.”

Aschenbrenner also promised that Situational Awareness would never again borrow money from banks to leverage its stock trading.

Filings that Situational Awareness submitted to the U.S. Securities and Exchange Commission show that the fund held slightly more than $200 million in U.S. stocks at the end of 2024. That figure rose to $5.5 billion at the end of 2025 and reached $13.7 billion at the end of March this year. In addition to successful bets on major winners such as SanDisk and Bloom Energy, the rapid growth in assets under management was driven by aggressive bets using leverage of several times the fund’s capital.

Under the reporting schedule, U.S. stock funds must file reports of their holdings as of June 30 by mid-August. Those filings will show the fund’s position shortly before the onset of “Black July.”

The letter did not disclose the fund’s latest assets under management. Many early investors remain subject to lockup agreements, meaning they may not be able to redeem their money until September at the earliest. Aschenbrenner said only that, despite the July losses, the fund’s year-to-date return was still 80%.

Market rumors have claimed that the fund’s assets under management reached as much as $45 billion in early July. After it was forced this week to sell leveraged stock positions to Citadel at a discount, its remaining holdings reportedly fell to about $10 billion, a figure that broadly fits with the 80% return. A considerable portion of those holdings consists of equity in AI company Anthropic.

People familiar with the matter said Aschenbrenner and Avital Balvit, chief of staff to Anthropic Chief Executive Officer Dario Amodei, are scheduled to marry this weekend. The couple confirmed their engagement last year.

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