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AI fund manager reportedly hit by forced-liquidation crisis as Citadel buys battered holdings

2026-08-01·newswire-us-stock-001242
AI fund manager reportedly hit by forced-liquidation crisis as Citadel buys battered holdings.

The Situational Awareness fund, which reportedly had $45 billion in assets under management in early July, suffered heavy losses and was forced to sell most of its publicly traded stock holdings under pressure from leveraged liquidations, according to multiple local media reports.

As of the end of June, the fund's net return for the year was reportedly as high as 439%, far above the average for Wall Street. News that the fund was being forced to sell its assets sent most of its portfolio holdings sharply higher after U.S. stocks opened Thursday.

The episode made 25-year-old Leopold Aschenbrenner, a rising star of the AI-trading boom of the past two years, the latest symbol of technology stocks' "black July." Public 13F filings and media reports identify major positions held by Aschenbrenner as SK hynix, SanDisk, fuel-cell company Bloom Energy, and emerging data-center developers Nebius and CoreWeave.

Stocks across the group had been cut roughly in half over the previous month. SanDisk, for example, fell from a June 30 closing price of $2,273 to $1,015 at Wednesday's close before reports emerged that Situational Awareness was liquidating positions. The fund also held short positions in software companies including Adobe, adding to its losses.

Leverage appears to have been the central problem. A person familiar with the matter said Situational Awareness had borrowed from banks to amplify its equity bets.

After technology stocks plunged across the board, prime brokers including Bank of America, Goldman Sachs and JPMorgan worked with the fund to help it meet margin requirements and reduce its positions in an orderly manner. The latest developments suggest that Aschenbrenner's investment story may not be over.

Citadel, the investment firm led by hedge-fund manager Ken Griffin, reportedly moved quickly and agreed within the past 24 hours to buy most of the fund's remaining $16 billion in publicly traded stock holdings.

Situational Awareness retained positions bought with its own capital, including client money, as well as investments in private companies such as Anthropic, together worth about $5 billion.

Citadel's intervention meant that Situational Awareness did not have to dump its holdings on the public market on a large scale, which was also seen as one reason technology stocks rose sharply on Thursday. Earlier Thursday, reports said Aschenbrenner had written to investors seeking additional capital.

In the letter, he said the technology-stock selloff had created "one of the most attractive investment opportunities" since early 2025. He also wrote that major AI advances could emerge in the second half of the year and that a potential Anthropic initial public offering could become a catalyst for a market recovery.

Aschenbrenner had no asset-management background before becoming an AI investment celebrity. Public information shows that he graduated from Columbia University at age 19 and then joined OpenAI's superalignment team. He was fired just one year later for violating OpenAI's confidentiality agreement.

He subsequently became prominent in AI circles after publishing a lengthy essay titled "Situational Awareness: The Next Ten Years," which attracted a nearly fanatical following online. He used that momentum to found the Situational Awareness fund.

Early investors included Stripe co-founders Patrick Collison and John Collison, along with Meta artificial-intelligence executives Daniel Gross and Nat Friedman. According to company filings with the U.S. Securities and Exchange Commission, Situational Awareness held slightly more than $200 million in U.S.

stocks at the end of 2024, $5.5 billion at the end of 2025, and $13.7 billion at the end of March this year. The 13F filings show only U.S. equity holdings and exclude private investments, overseas stocks, derivatives and cash. At the fund's peak, Wall Street quantitative-trading giant Jane Street Capital also invested in it.

Jane Street, one of Wall Street's most profitable firms, rarely allocates capital to outside fund managers. Aschenbrenner's personal life also advanced during the AI boom. Previous reports said he became engaged last year to Avital Balwit, the chief of staff and only direct report of Anthropic Chief Executive Dario Amodei.

#Stocks #Meta #AI #Gold #Earnings

Full text

AI fund manager reportedly hit by forced-liquidation crisis as Citadel buys battered holdings

The Situational Awareness fund, which reportedly had $45 billion in assets under management in early July, suffered heavy losses and was forced to sell most of its publicly traded stock holdings under pressure from leveraged liquidations, according to multiple local media reports. As of the end of June, the fund's net return for the year was reportedly as high as 439%, far above the average for Wall Street. News that the fund was being forced to sell its assets sent most of its portfolio holdings sharply higher after U.S. stocks opened Thursday. The episode made 25-year-old Leopold Aschenbrenner, a rising star of the AI-trading boom of the past two years, the latest symbol of technology stocks' "black July." Public 13F filings and media reports identify major positions held by Aschenbrenner as SK hynix, SanDisk, fuel-cell company Bloom Energy, and emerging data-center developers Nebius and CoreWeave. Stocks across the group had been cut roughly in half over the previous month. SanDisk, for example, fell from a June 30 closing price of $2,273 to $1,015 at Wednesday's close before reports emerged that Situational Awareness was liquidating positions. The fund also held short positions in software companies including Adobe, adding to its losses. Leverage appears to have been the central problem. A person familiar with the matter said Situational Awareness had borrowed from banks to amplify its equity bets. After technology stocks plunged across the board, prime brokers including Bank of America, Goldman Sachs and JPMorgan worked with the fund to help it meet margin requirements and reduce its positions in an orderly manner. The latest developments suggest that Aschenbrenner's investment story may not be over. Citadel, the investment firm led by hedge-fund manager Ken Griffin, reportedly moved quickly and agreed within the past 24 hours to buy most of the fund's remaining $16 billion in publicly traded stock holdings. Situational Awareness retained positions bought with its own capital, including client money, as well as investments in private companies such as Anthropic, together worth about $5 billion. Citadel's intervention meant that Situational Awareness did not have to dump its holdings on the public market on a large scale, which was also seen as one reason technology stocks rose sharply on Thursday. Earlier Thursday, reports said Aschenbrenner had written to investors seeking additional capital. In the letter, he said the technology-stock selloff had created "one of the most attractive investment opportunities" since early 2025. He also wrote that major AI advances could emerge in the second half of the year and that a potential Anthropic initial public offering could become a catalyst for a market recovery. Aschenbrenner had no asset-management background before becoming an AI investment celebrity. Public information shows that he graduated from Columbia University at age 19 and then joined OpenAI's superalignment team. He was fired just one year later for violating OpenAI's confidentiality agreement. He subsequently became prominent in AI circles after publishing a lengthy essay titled "Situational Awareness: The Next Ten Years," which attracted a nearly fanatical following online. He used that momentum to found the Situational Awareness fund. Early investors included Stripe co-founders Patrick Collison and John Collison, along with Meta artificial-intelligence executives Daniel Gross and Nat Friedman. According to company filings with the U.S. Securities and Exchange Commission, Situational Awareness held slightly more than $200 million in U.S. stocks at the end of 2024, $5.5 billion at the end of 2025, and $13.7 billion at the end of March this year. The 13F filings show only U.S. equity holdings and exclude private investments, overseas stocks, derivatives and cash. At the fund's peak, Wall Street quantitative-trading giant Jane Street Capital also invested in it. Jane Street, one of Wall Street's most profitable firms, rarely allocates capital to outside fund managers. Aschenbrenner's personal life also advanced during the AI boom. Previous reports said he became engaged last year to Avital Balwit, the chief of staff and only direct report of Anthropic Chief Executive Dario Amodei.

The Situational Awareness fund, which reportedly had $45 billion in assets under management in early July, suffered heavy losses and was forced to sell most of its publicly traded stock holdings under pressure from leveraged liquidations, according to multiple local media reports. As of the end of June, the fund's net return for the year was reportedly as high as 439%, far above the average for Wall Street.

News that the fund was being forced to sell its assets sent most of its portfolio holdings sharply higher after U.S. stocks opened Thursday. The episode made 25-year-old Leopold Aschenbrenner, a rising star of the AI-trading boom of the past two years, the latest symbol of technology stocks' "black July."

Public 13F filings and media reports identify major positions held by Aschenbrenner as SK hynix, SanDisk, fuel-cell company Bloom Energy, and emerging data-center developers Nebius and CoreWeave. Stocks across the group had been cut roughly in half over the previous month. SanDisk, for example, fell from a June 30 closing price of $2,273 to $1,015 at Wednesday's close before reports emerged that Situational Awareness was liquidating positions.

The fund also held short positions in software companies including Adobe, adding to its losses.

Leverage appears to have been the central problem. A person familiar with the matter said Situational Awareness had borrowed from banks to amplify its equity bets. After technology stocks plunged across the board, prime brokers including Bank of America, Goldman Sachs and JPMorgan worked with the fund to help it meet margin requirements and reduce its positions in an orderly manner.

The latest developments suggest that Aschenbrenner's investment story may not be over. Citadel, the investment firm led by hedge-fund manager Ken Griffin, reportedly moved quickly and agreed within the past 24 hours to buy most of the fund's remaining $16 billion in publicly traded stock holdings. Situational Awareness retained positions bought with its own capital, including client money, as well as investments in private companies such as Anthropic, together worth about $5 billion.

Citadel's intervention meant that Situational Awareness did not have to dump its holdings on the public market on a large scale, which was also seen as one reason technology stocks rose sharply on Thursday.

Earlier Thursday, reports said Aschenbrenner had written to investors seeking additional capital. In the letter, he said the technology-stock selloff had created "one of the most attractive investment opportunities" since early 2025. He also wrote that major AI advances could emerge in the second half of the year and that a potential Anthropic initial public offering could become a catalyst for a market recovery.

Aschenbrenner had no asset-management background before becoming an AI investment celebrity. Public information shows that he graduated from Columbia University at age 19 and then joined OpenAI's superalignment team. He was fired just one year later for violating OpenAI's confidentiality agreement.

He subsequently became prominent in AI circles after publishing a lengthy essay titled "Situational Awareness: The Next Ten Years," which attracted a nearly fanatical following online. He used that momentum to found the Situational Awareness fund. Early investors included Stripe co-founders Patrick Collison and John Collison, along with Meta artificial-intelligence executives Daniel Gross and Nat Friedman.

According to company filings with the U.S. Securities and Exchange Commission, Situational Awareness held slightly more than $200 million in U.S. stocks at the end of 2024, $5.5 billion at the end of 2025, and $13.7 billion at the end of March this year. The 13F filings show only U.S. equity holdings and exclude private investments, overseas stocks, derivatives and cash.

At the fund's peak, Wall Street quantitative-trading giant Jane Street Capital also invested in it. Jane Street, one of Wall Street's most profitable firms, rarely allocates capital to outside fund managers.

Aschenbrenner's personal life also advanced during the AI boom. Previous reports said he became engaged last year to Avital Balwit, the chief of staff and only direct report of Anthropic Chief Executive Dario Amodei.

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