The fund run by the 24-year-old “AI Nostradamus” needed new capital following the tech sector’s downturn

Situational Awareness, an AI-focused hedge fund founded by former OpenAI employee Leopold Aschenbrenner, is trying to raise new capital following heavy losses caused by a slump in tech stocks, the Financial Times has learned. Aschenbrenner, 24, has become a Wall Street star and has amassed an impressive following thanks to his predictions about the development of artificial intelligence.

In recent days, the Situational Awareness fund, with $20 billion in assets, has held talks with existing investors and creditors in an effort to raise new capital, sources told the FT. According to them, the fund has also offered to sell a portion of its portfolio assets to some investors. One of the sources described these talks as one-off rather than part of a coordinated campaign.

The attempt to raise capital comes amid a sharp decline in the value of the fund’s assets due to the strong market volatility of recent weeks, sources told the FT. This marks a sharp turnaround for Situational Awareness, which had shown rapid growth in the first half of the year amid a broad rally in AI stocks, the newspaper noted.

Several of the publication’s sources say that Situational Awareness used leverage to boost returns—a popular hedge fund strategy that, however, greatly amplifies losses during a downturn.

In a letter to investors dated July 24 outlining the results for the first half of the year, which the FT reviewed, Aschenbrenner acknowledged that the fund “was not immune” to market turmoil, particularly in Asia, but called the sell-off in the tech sector one of the most attractive opportunities since the beginning of 2025.

“From time to time, we highlight opportunities that seem like particularly good times to add to your holdings if you’ve been waiting for the right moment,” he added. The newspaper notes that the letter encourages investors to make new investments on August 1.

As of the end of June, Situational Awareness’s net return since the beginning of the year stood at 439%, which is many times higher than typical Wall Street returns, the FT added, citing the letter.

Aschenbrenner is counting on a market recovery driven by major developments in the AI sector in the second half of the year—including Anthropic’s expected IPO, the newspaper added.

Situational Awareness did not respond to the FT's requests for comment.

Aschenbrenner founded a hedge fund following the publication of his essay “Situational Awareness: The Decade Ahead” (“Situational Awareness: The Decade Ahead”), in which he described in detail how, in his view, AI would radically transform society in the coming years.

According to the report released at the end of March, some of the fund’s largest disclosed positions have plummeted in recent days. Shares of Oracle and AMD have each lost about 20% over the past month, while smaller holdings have fallen even further: these include “neo-cloud” companies Nebius and Sharon AI, energy startup Bloom Energy, and a number of memory manufacturers, including SanDisk.

This article was AI-translated and verified by a human editor