Ken Griffin's Citadel acquires significant portion of Leopold Aschenbrenner's Situational Awareness portfolio to stabilize AI-focused investments
Ken Griffin's Citadel has provided a financial rescue for the hedge fund Situational Awareness, founded by Leopold Aschenbrenner. The fund, which was heavily concentrated in AI-related stocks and utilized high levels of leverage, faced a series of margin calls that forced a significant sell-off of its public equity holdings. Leopold Aschenbrenner, a former OpenAI researcher, saw his fund's assets plunge from a peak of $45 billion to approximately $10 billion after selling its leveraged bets on companies like SK Hynix and CoreWeave at a discount to Citadel. The move helps mitigate investor concerns regarding the volatility of the AI boom. While the fund's public holdings were sold, Situational Awareness retains its stakes in private companies, including a large investment in Anthropic. The rapid rise and fall of the fund serves as a cautionary tale regarding the risks of high concentration and heavy leverage in the public markets.