Young AI Hedge Fund Unloads Public Stocks After Major Losses, Holds Anthropic Bet

A hedge fund betting on AI infrastructure has dramatically downsized after steep market losses forced a retreat into its safer positions. Situational Awareness, founded by 25-year-old Leopold Aschenbrenner, unloaded most of its public equity portfolio to Ken Griffin's Citadel following a sharp decline in the fund's value, according to reporting from the Wall Street Journal and other financial outlets.

The Collapse of a Meteoric Rise#

Aschenbrenner's fund had soared spectacularly just months earlier. Through June, Situational Awareness delivered a 439% return, and assets under management ballooned to as much as $45 billion at their peak. The fund's core thesis—that AI's explosive growth would require major buildouts in chips, compute capacity, memory, and energy infrastructure—initially proved prescient as the founder invested heavily in semiconductor and power-generation companies.

That momentum evaporated when confidence in AI infrastructure spending cooled. Stocks held by the fund, including memory-chip makers SK Hynix and SanDisk, energy company Bloom Energy, and cloud provider Nebius Group, each plunged more than 30% in a month. Leverage—the fund's use of borrowed money to amplify returns—amplified the damage on the downside.

A Calculated Retreat to Citadel#

Rather than try to weather the storm, Aschenbrenner made the strategic move to sell. Citadel picked up the bulk of the public holdings, a pattern consistent with Griffin's hedge fund swooping in to acquire assets from rivals forced to liquidate. After the transaction, Situational Awareness shrank from around $20 billion to roughly $10 billion in total assets.

Even as losses mounted, Aschenbrenner had tried to frame the downturn as opportunity. In a July 24 letter to investors, he cast the selloff as "one of the best buying opportunities since early last year" and asked clients to commit additional capital beginning August 1. Bloomberg reported that few investors answered the call.

Private Bets Remain Intact#

The fund preserved its higher-conviction private holdings, a choice that may prove decisive for its eventual recovery. Situational Awareness still owns a stake in Anthropic currently valued at $5 billion. With Anthropic expected to go public as soon as October at potentially higher valuations than its most recent private round (at $965 billion in May), that investment alone could offset significant losses.