AI Fund Sells Holdings After Significant Losses
AI-focused hedge fund Situational Awareness has sold a significant portion of its public equities following substantial losses in AI and software stocks. The fund will continue to operate as a private investment firm.
San Francisco – Situational Awareness, an AI-focused hedge fund led by former OpenAI researcher Leopold Aschenbrenner, has divested a substantial part of its public stock holdings after incurring significant losses on AI and software investments. The transactions were reportedly made to Ken Griffin's Citadel fund.
The $24 billion fund is said to have sold the majority of its public equities to Ken Griffin's $71 billion Citadel fund. Situational Awareness, which retains a private stake estimated at over $5 billion in AI company Anthropic, will continue to operate as a private investment firm.
Aschenbrenner, 25, launched his San Francisco-based fund in September 2024, after a tenure with OpenAI's Superalignment team. The young investor's strategy appears to have faced headwinds amidst a turbulent market for technology stocks.
The move follows reports of heavy losses for Situational Awareness in recent weeks, coinciding with a downturn in AI and semiconductor shares. Positions reportedly included stakes in South Korean memory chip maker SK Hynix and short positions in software companies such as Adobe.
In response to these losses, the fund was reportedly seeking to raise cash to meet margin requirements, with its prime brokers, including Bank of America, Goldman Sachs, and JPMorgan Chase, involved in the process.