Leopold Aschenbrenner's AI-focused hedge fund Situational Awareness faces a dramatic near-collapse after a series of margin calls and distressed sales.
Leopold Aschenbrenner, a former OpenAI researcher, saw his hedge fund Situational Awareness experience a significant decline in assets. The fund, which peaked at $45 billion earlier this month, plummeted to approximately $10 billion after being forced to sell its public holdings at a discount to Ken Griffin's Citadel. This collapse was driven by a series of margin calls from prime brokers including Bank of America, Goldman Sachs, and JPMorgan Chase, which forced the sale of leveraged positions in AI infrastructure names like SK Hynix and CoreWeave. While the fund had posted gains of over 1,000% since its inception in July 2024, its heavy reliance on 400% leverage made it vulnerable to the recent volatility in semiconductor stocks. Critics noted that Aschenbrenner, who had no prior professional investing experience, was more of a visionary than a traditional trader. Despite the setback, the fund retains its private holdings, primarily its stake in Anthropic. The near-collapse occurs as Aschenbrenner prepares to marry Avital Balwit this weekend.