Archive · 31 Jul 2026
AI Hedge Fund Falls 67% After Leverage Crisis
Leopold Aschenbrenner started a hedge fund that used computers to pick AI companies.
It grew fast and made a lot of money, but it also borrowed a lot of money to try to make even more.
When AI stocks fell, the fund had to sell many of its investments to pay back the money it borrowed.
This caused the fund’s value to drop a lot in one month.
A big investor, Citadel, bought a big part of the fund and sold all its public shares.
The fund still keeps a share in a company called Anthropic, which might help it recover.
Situational Awareness grew to over $45B in assets before a 67% loss in July 2026.
The fund’s 4x leverage and heavy AI stock bets triggered margin calls and forced sales.
Citadel’s Ken Griffin bought nearly half the portfolio and sold all public holdings.
Key holdings included Sandisk, Bloom Energy, Nebius Group, CoreWeave, Core Scientific, and SK Hynix.
The fund’s only remaining anchor is a stake in Anthropic, which has not been sold.
- Who
- Leopold Aschenbrenner, Ken Griffin, Citadel, Situational Awareness
- What
- Collapse of an AI‑focused hedge fund after a 67% loss in July 2026
- When
- July 2026
- Where
- Wall Street, United States
- Why
- High leverage and falling AI stock prices triggered margin calls and forced sales
- Fund name
- Situational Awareness
- Founder
- Leopold Aschenbrenner
- Peak assets
- $45 billion
- YTD return (Jan‑Jun 2026)
- 439%
- July loss
- 67%
- Leverage
- 4x
- Current portfolio value
- $10 billion
- Anchor stake
- Anthropic