AI Hedge Fund Situational Awareness Divests Public Holdings but Retains Stake in Anthropic
Situational Awareness, a hedge fund founded by Leopold Aschenbrenner, a former researcher at OpenAI, has offloaded most of its public stock holdings to Citadel, led by Ken Griffin, following significant losses in recent weeks, as reported on Thursday. This marks a dramatic shift for Aschenbrenner, who has been labeled both “exceptionally intelligent” and “audacious.”
At just 25 years old and originally from Germany, Aschenbrenner entered the trading world without any previous experience when he established his fund in 2024. He rose to prominence by advocating for investments in semiconductors, computing power, memory, and energy infrastructure as essential for scaling AI.
Aschenbrenner became part of OpenAI’s “superalignment” team in 2023, shortly after graduating as valedictorian from Columbia University at the age of 19 (after starting there at 15). However, he was let go a year later for allegedly disclosing internal information improperly. During his tenure, the team was managed by OpenAI co-founder Ilya Sutskever and researcher Jan Leike, both of whom later departed to pursue other ventures. Following his exit, Aschenbrenner launched his hedge fund.
For a time, Situational Awareness was thriving, posting a staggering 439% return in the first half of the year, as reported. Its assets peaked at approximately $45 billion before experiencing a sharp decline alongside a general downturn in investments related to AI infrastructure.
Despite the downturn, Aschenbrenner remained optimistic, describing the selloff in a letter to investors as one of the best buying occasions since early the previous year and urged clients to invest additional funds starting August 1. However, the anticipated influx of investments did not materialize, according to reports.
The fund’s portfolio took hits particularly in stocks of memory chip firms like SK Hynix and Sandisk, as well as clean energy company Bloom Energy and cloud provider Nebius Group—all of which suffered declines exceeding 30% in the past month. Concerns arose among public investors that substantial capital expenses were not leading to immediate revenue. Additionally, heightened leverage, a common tactic in hedge funds involving borrowed capital to purchase stocks, intensified the fund’s losses.
Following Citadel’s acquisition of much of its stock, Situational Awareness saw its total assets reduce to around $10 billion, down from about $20 billion in previous months.
At its launch, Situational Awareness secured several hundred million dollars, with early investors including the quantitative trading firm Jane Street, Stripe’s co-founders, and executives from Meta.
Citadel’s buying spree aligns with its established strategy of acquiring valuable assets amid market volatility and leveraged sell-offs. Before acquiring assets from Situational Awareness, Citadel already held similar investments in AI infrastructure, indicating that Griffin shares Aschenbrenner’s belief in the sector’s eventual rebound.
However, the hedge fund retained its investments in private companies. Notably, it still holds a $5 billion stake in Anthropic, which many view as a lucrative asset poised for further appreciation. Anthropic was recently valued at $965 billion in a Series H funding round in May, with a potential public offering on the horizon as early as October, possibly at a higher valuation. The proceeds from these private shares could help mitigate some of the losses incurred in the public market.
Other private investments in Situational Awareness’s portfolio include chip manufacturer MatX and AI data center startup Fluidstack, which was reportedly seeking new funding at an $18 billion valuation as of April.
Efforts to reach out to Aschenbrenner for comments have been made.
