Citadel has acquired the majority of the public equity portfolio of Situational Awareness, an artificial intelligence-focused hedge fund led by 24-year-old Leopold Aschenbrenner, following a severe market downturn in July. The transaction occurred after asiaone.com suffered heavy losses, leading to discussions between Aschenbrenner and Citadel founder Ken Griffin.
Citadel Acquires Public Portfolio of Leopold Aschenbrenner’s AI Fund
The sale represents one of the largest hedge fund portfolio restructurings tied to the recent sell-off in AI equities. According to sources, Citadel specifically acquired the portion of the portfolio that had been financed through borrowed money from prime brokers. The deal was facilitated by several major financial institutions, including Citigroup, Bank of America, JPMorgan Chase, and Goldman Sachs.
Rapid Growth and Sudden Collapse
Before the July crash, Aschenbrenner—who had no prior investing experience—built a rapidly growing fund backed by prominent figures. Investors included Meta executives Nat Friedman and Daniel Gross, Stripe co-founders John and Patrick Collison, and Jane Street. The fund reportedly grew to as much as $45 billion and delivered a 439% return from the start of the year through the end of June.
The fortunes reversed sharply in July. The Wall Street Journal reported that the fund fell approximately 67% during that month. Aschenbrenner informed investors that the losses were intensified by short sellers targeting the fund’s largest positions. Despite the mounting losses, Aschenbrenner wrote a letter to investors on July 24 describing the decline in technology investments as a buying opportunity.
The fund’s public holdings included several high-profile AI beneficiaries, such as CoreWeave, Intel, and Broadcom. These companies faced heightened volatility as investors began reassessing lofty valuations across the sector. Under pressure to either reduce exposure by selling assets or raise more capital, Situational Awareness ultimately chose to dispose of the bulk of its listed holdings.
Remaining Assets and AI Market Context
While the sale to Citadel significantly reduced its public market exposure, Situational Awareness will continue to manage a portfolio valued at roughly $10 billion. This remaining portfolio consists of private investments and listed securities, including an untouched stake in the AI start-up Anthropic.
The collapse of Aschenbrenner’s public portfolio mirrors a broader trend among hedge funds. A Goldman Sachs client note indicated that U.S. hedge funds sold tech hardware stocks for four consecutive weeks leading up to July 6. This trend was driven by profit-taking and concerns regarding the timing of returns on massive AI spending. The SOX index, which tracks semiconductor stocks, fell 4.2% in the week ending July 3.
The impact was particularly acute for Asia-focused long-short hedge funds, which lost an average of 18.6% between July 1 and July 28 as investors reduced technology exposure.
Aschenbrenner’s Background
Leopold Aschenbrenner, born in Germany, established his reputation in the AI field before entering finance. He was the valedictorian of Columbia University at age 19 and later worked on the Superalignment team at OpenAI, focusing on the long-term safety of advanced AI systems. He was fired from OpenAI in 2024 over allegations that he shared internal information with external researchers, a characterization he has disputed.
In June 2024, Aschenbrenner published a 165-page essay titled Situational Awareness,
which detailed predictions regarding the economy and the importance of AI. This publication preceded the founding of his hedge fund.
| Metric/Detail | Situational Awareness Data |
|---|---|
| Peak Reported Size | Up to $45 billion |
| Returns (Jan – June) | 439% |
| July Decline | Approximately 67% |
| Remaining Portfolio Value | Roughly $10 billion |
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