Situational Awareness, the AI-focused hedge fund founded by former OpenAI researcher Leopold Aschenbrenner, has sold the majority of its public equity portfolio to Ken Griffin's Citadel after a sharp drawdown in AI infrastructure stocks. The fund's assets fell to roughly $10 billion after the sale, down from about $20 billion in recent months and a peak near $45 billion. Its private book, anchored by a stake in Anthropic valued at $5 billion, remains intact.
The unwind ends a run that had made Aschenbrenner one of the most-watched debut managers in the market. Situational Awareness returned 439% for the year through June, according to the Financial Times, on a thesis that scaling AI would require a sustained build-out in semiconductors, compute, memory, and energy. That thesis compounded through the first half of 2026, then cracked in July as public investors questioned whether the sector's capital expenditures were translating into near-term revenue.
The hardest-hit names in the fund's public portfolio included memory chip producers SK Hynix and Sandisk, clean-energy developer Bloom Energy, and neocloud provider Nebius Group. Each has fallen more than 30% over the past month. Losses were amplified by leverage, a standard hedge-fund tool that magnifies both directions of a trade and forced the pace of the eventual unwind.
Key facts
- 01Situational Awareness returned 439% for the year through June, with assets peaking near $45B before the July drawdown.
- 02After Citadel bought the bulk of the public holdings, the fund's assets fell to roughly $10B, down from about $20B in recent months.
- 03The fund kept its private book, including an Anthropic stake now valued at $5B, with Anthropic last marked at $965B in May.
- 04Hardest-hit public positions included SK Hynix, Sandisk, Bloom Energy, and Nebius Group, each down more than 30% over the past month.
- 05Aschenbrenner, 25, launched the fund in 2024 after being dismissed from OpenAI's superalignment team in 2024.
Aschenbrenner, 25, launched Situational Awareness in 2024 with several hundred million dollars from a roster that included quant firm Jane Street, Stripe co-founders Patrick and John Collison, and former GitHub CEO Nat Friedman alongside Daniel Gross. He had no prior trading experience. He enrolled at Columbia at 15, graduated valedictorian at 19, and joined OpenAI's superalignment team in 2023, working under Ilya Sutskever and Jan Leike before being dismissed a year later over what the company described as an improper disclosure of internal information.
In a July 24 letter to investors seen by the Financial Times, Aschenbrenner framed the selloff as a buying opportunity and invited clients to commit fresh capital starting August 1.
“one of the best buying opportunities since early last year”— Leopold Aschenbrenner, Founder of Situational Awareness
According to Bloomberg, the pitch didn't land the way he hoped, and the position with Citadel followed. Griffin's firm has a long pattern of stepping into forced unwinds by leveraged players, and Citadel's own book already included several of the same AI infrastructure names — suggesting Griffin, like Aschenbrenner, expects a recovery but has the balance sheet to wait.
The private holdings tell a very different story. Situational Awareness kept its stake in Anthropic, currently valued at $5 billion, according to Bloomberg. Anthropic was last priced at $965 billion in its Series H round in May and is expected to go public as soon as October, potentially at a higher mark. A liquidity event on those shares could offset a meaningful portion of the public-market losses on its own.
The fund also retains stakes in AI chip startup MatX and AI data center operator Fluidstack, which was in talks in April to raise a new round at an $18 billion valuation. Those positions reflect the same infrastructure thesis that hurt the public book, but on a much longer horizon and without daily mark-to-market pressure.
The gap between the two books is the story. Public AI infrastructure equities repriced in a matter of weeks on concerns about capex-to-revenue conversion, while the private-market marks on frontier labs and their picks-and-shovels suppliers have continued to climb. A single fund holding both sides now shows what happens when those two curves move in opposite directions at the same time — with leverage on one and a lockup on the other.
It is also unclear whether the invitation to add capital on August 1 will draw meaningful commitments after a 30%-plus drawdown in the fund's most concentrated public names. Aschenbrenner's public thesis has not changed, but the base of investors willing to underwrite a 25-year-old first-time manager through a leveraged AI-infrastructure drawdown is narrower than the base that underwrote a 439% year.
The read-through for the AI market is that the split between public and private valuations is now doing real work on hedge-fund balance sheets, not just on paper. If Anthropic prices its IPO at or above the $965 billion May mark, Situational Awareness ends the year as a story of a well-timed private book bailing out a badly-timed public one. If the IPO slips or prices below expectations, the fund will have taken the worst of both markets — a leveraged public drawdown and a private stake that never got its exit.
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