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Leopold Aschenbrenner's AI-focused hedge fund experienced a significant collapse in value after a concentrated wager on memory and AI infrastructure.

Leopold Aschenbrenner, a former OpenAI researcher, saw his AI-focused hedge fund, Situational Awareness, experience a sharp decline in value during late July. The fund's portfolio, which reached a peak of $45 billion in assets, plummeted to approximately $10 billion following a concentrated, levered wager on memory and AI infrastructure stocks. Specifically, Aschenbrenner heavily invested in SanDisk and Micron Technology, which accounted for 56% of the fund's US stock portfolio at the end of June. While these companies saw extraordinary gains leading up to the selloff, their prices fell significantly in July. SanDisk shares dropped by over 50% in a 29-day window, while Micron shares declined by more than one-third. The fund's collapse was driven by the high level of leverage and concentrated exposure to cyclical companies. To manage the remaining assets, Aschenbrenner sold much of his liquid positions to Citadel. The fund's private holdings, including a reported $5 billion stake in Anthropic, now provide much of the remaining support for the fund's valuation.

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