Leopold Aschenbrenner's $20 Billion AI Hedge Fund Imploded. Here's How It's Still Up 80% This Year
Citadel bought most of the fund’s public stocks at a discount after AI bets fell 67% in July and triggered lender demands.
- Leopold Aschenbrenner's hedge fund, Situational Awareness, sold the bulk of its public equities portfolio to Citadel after facing margin calls, with billionaire founder Kenneth Griffin sealing the rescue deal in an early morning phone call.
- Situational Awareness grew from less than $1 billion in early 2025 to $45 billion by July, but Goldman Sachs, one of the fund's larger lenders, demanded loan repayment when AI stocks plummeted, forcing a fire sale.
- Over 30 hours, the fund offloaded roughly $20 billion in stocks to meet lender requirements, claiming to sell distressed hedges despite holding monster bets against Adobe that appeared stronger than ever.
- Aschenbrenner vowed to "learn the necessary lessons from this experience" in a letter to investors after the fund suffered a 67% loss in July, promising to fight another day.
- Roughly $8 billion remains of the fund's assets, down from $30 billion at July's start, and Wall Street views the subsequent market rally as a temporary reprieve rather than proof the broader financial fallout will be contained.
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18 Articles
Leopold Aschenbrenner and his Situational Awareness hedge fund were still more than 200 percent up in May. A few months later, he was forced to make emergency sales. Private investors can also learn from this.
Leopold Aschenbrenner's AI Hedge Fund Just Blew Up, and It Highlights an Endemic Problem for Wall Street
Key PointsLeopold Aschenbrenner gained notoriety on Wall Street for his artificial intelligence (AI)-focused fund's gains, which at one point topped 1,000% since inception.However, leverage is a two-way street, and it came home to roost last week for Aschenbrenner's fund, Situational Awareness. Outstanding margin debt is skyrocketing, which has historically been one of the top red flags on Wall Street.10 stocks we like better than S&P 500 Index …
Leopold Aschenbrenner's $20 Billion AI Hedge Fund Imploded. Here's How It's Still Up 80% This Year
Leopold Aschenbrenner called AI correctly, built a $20 billion fund, and still watched his entire public portfolio get seized by Citadel to cover margin calls. The reason his fund survived at all reveals a strange quirk in how hedge fund performance actually gets measured.
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