AI hedge fund Situational Awareness sells its public portfolio, keeps Anthropic stake

Situational Awareness, a hedge fund formed 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 Thursday. It is a major comedown for the rising star who has been described as both "scarily smart" and "brash."

Aschenbrenner, 25, had no prior trading experience before launching the fund in 2024. He built his reputation on an investment thesis arguing that scaling AI would require a major build-up in semiconductors, compute, memory, and energy infrastructure. He joined OpenAI's superalignment team in 2023 and was dismissed a year later over what the company described as an improper disclosure of internal information.

Things could not have been going better for Situational Awareness until very recently. The fund returned 439% for the year through June, according to the Financial Times, and assets under management reportedly grew to as much as $45 billion at their peak before positions began dropping sharply amid a broader decline in AI infrastructure investments, CNBC reported.

Even after losses mounted, Aschenbrenner did not flinch. In a July 24 letter to investors, he called the selloff one of the best buying opportunities since early last year and invited clients to commit fresh capital starting August 1 — but according to Bloomberg, the appeal did not draw the commitments he had hoped for.

Some of the hardest-hit stocks in the fund included memory chip makers SK Hynix and Sandisk, clean energy developer Bloom Energy, and neocloud provider Nebius Group, all down more than 30% over the past month. AI infrastructure equities fell as public investors worried that massive capital expenditures were not translating into near-term revenue, and leverage amplified the fund's losses.

After Citadel bought the bulk of those holdings, Situational Awareness' overall assets fell to roughly $10 billion, down from around $20 billion in recent months, according to Bloomberg. The fund raised several hundred million dollars at its outset, with early backers including quant firm Jane Street, Stripe co-founders Patrick and John Collison, and Meta executives Daniel Gross and Nat Friedman.

Citadel's purchase fits a familiar pattern: Ken Griffin's hedge fund has a reputation for stepping in to snap up attractive assets when leveraged players are forced to unwind. Even before this deal, Citadel's portfolio featured some of the same AI infrastructure bets, suggesting Griffin also expects the sector to recover and can afford to wait it out.

Situational Awareness did not, however, sell its private investments. Most notably, it still holds a stake in Anthropic that Bloomberg values at $5 billion; Anthropic was last valued at $965 billion in a Series H round in May and is expected to go public as soon as October, potentially at an even higher valuation. Other private holdings include chipmaker MatX and AI data center startup Fluidstack.

If Anthropic does go public, a windfall from selling those shares could offset some of the fund's public-market losses.