A $45B AI fund lost 67% in one month and sold its book to Citadel

Situational Awareness, the hedge fund Leopold Aschenbrenner launched after leaving OpenAI in 2024, traded his essay thesis: AI would need an enormous build-out of chips, memory and power. The fund ran leveraged longs on AI infrastructure — SK Hynix, Nebius, Sandisk, Micron, CoreWeave — against shorts on software companies such as Adobe. Through June 2026 it returned about 439% and swelled to roughly $45 billion of assets by early July.

Then the AI trade cracked: the sector shed some $3 trillion of market value, the fund's biggest holdings each fell more than 35% in July, and the software shorts moved the wrong way. Prime brokers Bank of America, Goldman Sachs and JPMorgan issued margin calls. The fund lost about 67% in July and was forced to sell its entire public book — roughly $16 billion — which Ken Griffin's Citadel agreed to buy at a discount of about 10%, in trades arranged around 30 July 2026.

What remained was roughly $10 billion, mostly private holdings including a stake in Anthropic. Even then the fund was up about 80% on the year — July's margin call erased the compounding of a leveraged run while the market argued over whether the AI trade itself had broken, or just its financing.