A 23-Year-Old Built a $45 Billion AI Fund But Lost $35 Billion in Weeks!
Keypoints:
- Leopold Aschenbrenner's hedge fund Situational Awareness peaked at $45 billion, up 439% in June
- The fund reportedly used leverage of up to 400%
- AI infrastructure stocks like SK Hynix and CoreWeave dropped sharply, triggering margin calls
- Prime brokers forced a fire sale of the entire public portfolio to Ken Griffin's Citadel, at a discount
Leopold Aschenbrenner spent 2024 writing a 165-page manifesto called "Situational Awareness" that made him one of Silicon Valley's most talked-about AI voices, a former OpenAI researcher turned self-styled prophet for the coming age of artificial superintelligence. This week, the hedge fund he named after that very manifesto became the industry's cautionary tale instead.
The rise had been extraordinary. At its peak earlier this month, Situational Awareness managed roughly $45 billion in assets after returning 439% through June. Those gains came from big bets on AI infrastructure companies such as SK Hynix, CoreWeave, Nebius, and SanDisk. The strategy also relied on leverage reportedly reaching 400%, a level many experienced Wall Street traders had already warned left very little room for anything to go wrong.
The turning point came quickly. AI infrastructure stocks were hit hard during this month's broader semiconductor selloff, and several of the fund's biggest positions lost more than 35% in just a few weeks. That was enough to trigger margin calls from its prime brokers, including Bank of America, Goldman Sachs, and JPMorgan Chase. The fund couldn't meet those demands on its own terms, leaving it with little choice but to start selling.
What followed wasn't the kind of exit any fund manager wants. Aschenbrenner sold his entire public stock portfolio in a single block trade to Ken Griffin's Citadel, with reports suggesting the deal went through at a discount because of the urgency. By the time the selling ended, the fund's assets had fallen from $45 billion to roughly $10 billion. It was a remarkable reversal for someone who had built a reputation arguing that he understood the future of AI better than almost anyone else.