Situational Awareness Drops to $10 Billion as Citadel Steps In

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(Bloomberg) — Assets at Leopold Aschenbrenner’s hedge fund Situational Awareness have slumped to about $10 billion after Ken Griffin’s Citadel stepped in to buy the bulk of its public stock bets. 

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That’s down by more than half from recent months, according to a person familiar with the matter, who asked not to be named discussing non-public information. Aschenbrenner’s fund began liquidating some of its equity positions after suffering losses in the AI stock rout in recent weeks, according to people familiar with the matter. 

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Situational Awareness had more than $20 billion in assets as of late May, the Wall Street Journal reported at the time. Some of its biggest positions rallied further from there before plunging this month. 

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This week’s sales have repaid the banks for the leverage Situational Awareness used to juice its bets, one of the people said.  

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While Situational Awareness’ stunning rise and rushed asset sale has captivated the industry, Aschenbrenner may have escaped the fate of the last big leveraged blowout on Wall Street.

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Bill Hwang’s Archegos Capital Management was caught up in a death spiral in 2021 after banks heaped his fund with margin calls that forced a liquidation of positions that had been powered higher by his wagers. Aschenbrenner, on the other hand, might come out of this week with a portfolio that’s still larger than most hedge funds, anchored by valuable stakes in private companies that he’s managed to keep.

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Situational Awareness still has private stakes including in Anthropic PBC, a holding which is valued at about $5 billion, said one of the people familiar with the matter.

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Aschenbrenner is well known in Silicon Valley as an AI researcher who raised alarm bells about the risks of the tech race and how fast the changes could occur, according to a 2024 note he titled, Situational Awareness. That same year, he started the investment firm, which had about eight employees as of the end of last year, according to a regulatory filing.

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Situational Awareness has been an investor in companies tied to the AI boom, including Bloom Energy Corp., semiconductor maker Sandisk Corp. and cloud service provider CoreWeave Inc. The hedge fund also helped lead a funding round for MatX, an AI chip startup founded by two alumni of Google’s semiconductor business.

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Aschenbrenner’s fund also held a stake in AI-focused cloud platform Nebius Group NV, which has tumbled from its peak in June. Situational Awareness also was exposed to the AI boom through Asia-based companies such as SK Hynix Inc., which debuted on a US exchange earlier this month. But its American depositary receipts have slumped since then and are still trading below the $149 listing price.

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