"AI-Nostradamus" sold part of its portfolio due to losses from the tech stock crash
The Leopold Aschenbrenner Foundation sold most of its stock portfolio to billionaire Ken Griffin's Citadel / Photo: X / Dwarkesh Patel
Leopold Aschenbrenner’s Situational Awareness hedge fund, which had been rapidly gaining popularity, sold off most of its stock portfolio, according to The Wall Street Journal. The fund ran into difficulties after its investments in artificial intelligence-related companies resulted in heavy losses in July.
Details
According to WSJ sources, the buyer was Citadel, the investment firm owned by billionaire Ken Griffin. However, Citadel acquired only the portion of Situational Awareness’s equity portfolio that had been built with borrowed funds, the sources said. The hedge fund retained the remaining portion of the portfolio, which was purchased with client funds. Additionally, according to WSJ sources, Situational retained its investments in private companies, including its stake in AI giant Anthropic.
Context
Situational, led by former OpenAI employee Leopold Aschenbrenner, has rapidly grown its assets under management in less than two years since its founding. According to a CNBC source, the fund’s assets reached $45 billion as of early July. Aschenbrenner, known as the “AI Nostradamus,” was considered something of a visionary in the AI space: other investors closely followed his fund, which made large bets using leverage, according to the WSJ. In a July 24 letter to investors, Aschenbrenner reported a net return of 439% as of June 30, according to the Financial Times, which reviewed the letter.
This result was achieved in part through the active use of borrowed funds, which backfired on the hedge fund in July when a sell-off of AI-related stocks began in the market. On July 30, the Financial Times reported that Situational Awareness was facing a capital shortfall and had begun seeking buyers for its assets.
Situational’s largest holdings at the end of the first quarter were Nebius Group and CoreWeave, providers of cloud-based AI infrastructure and computing power, and Sandisk and Micron, manufacturers of data storage devices. All four stocks have fallen by more than 35% this month.
This article was AI-translated and verified by a human editor
