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Situational Awareness, a hedge fund formed by former OpenAI researcher Leopold Aschenbrenner, has sold the majority of its public stock portfolio to Ken Griffin\u2019s Citadel following steep losses over the past month, The Wall Street Journal reported<\/a> earlier on Thursday. It\u2019s a big comedown for the rising star who has been described<\/a> as both \u201cscarily smart,\u201d and \u201cbrash.\u201d<\/p>\n German-born Aschenbrenner, who is 25, had no prior trading experience before launching the fund in 2024. He gained prominence for his investment thesis after publishing essays arguing that scaling AI would require a major build-up in semiconductors, compute, memory, and energy infrastructure.<\/p>\n He joined OpenAI\u2019s \u201csuperalignment\u201d team in 2023, two years after graduating as valedictorian<\/a> from Columbia at 19 (he enrolled at age 15). But he was dismissed from the company a year later over what it described as an improper disclosure of internal information. At the time, that team was led by OpenAI co-founder Ilya Sutskever and AI researcher Jan Leike. Soon after, Sutskever left to start his own company<\/a>, Leike joined<\/a> rival Anthropic, and Aschenbrenner launched his fund.<\/p>\n Things couldn\u2019t have been going better for Situational Awareness until very recently. The fund returned 439% for the year<\/a> through June, Financial Times reported. Assets under management reportedly grew to as much as $45 billion<\/a> during their peak before the fund\u2019s positions began dropping sharply amid a broader decline in AI infrastructure investments, CNBC reported.<\/p>\n Even after losses mounted, Aschenbrenner didn\u2019t flinch. In a July 24 letter to investors seen by FT<\/a>, he called the selloff one of the best buying opportunities since early last year and invited clients to commit fresh capital starting August 1. According to Bloomberg, the appeal didn\u2019t garner the commitments he\u2019d hoped would materialize.<\/p>\n Some of the hardest-hit stocks held by the fund<\/a> included memory chip producers SK Hynix and Sandisk, clean energy developer Bloom Energy, and neocloud provider Nebius Group, all of which have plummeted by more than 30% over the past month. AI infrastructure equities fell as public investors grew concerned that massive capital expenditures weren\u2019t translating into near-term revenue. The fund\u2019s losses were amplified by leverage, a common hedge fund strategy of using borrowed money to buy stocks.<\/p>\n After Citadel bought the bulk of those holdings, Situational Awareness\u2019 overall assets fell to roughly $10 billion<\/a>, Bloomberg reported, down from around $20 billion<\/a> in recent months, per an earlier WSJ report.<\/p>\n Situational Awareness raised several hundred million dollars at its outset. Early backers of the fund include quant-trading firm Jane Street, Stripe co-founders Patrick and John Collison, and Meta executives Daniel Gross and Nat Friedman.<\/p>\n Citadel\u2019s purchase fits a familiar pattern for Citadel. Ken Griffin\u2019s hedge fund has a reputation for stepping in to snap up attractive assets when leveraged players are having to unwind themselves. Even before picking up some of Situational Awareness\u2019 holdings, Citadel\u2019s portfolio featured some of the same AI infrastructure bets<\/a>, suggesting that, like Aschenbrenner, Griffin expects the sector to recover and has the ability to wait it out.<\/p>\n Situational Awareness did not, however, sell its investments in private companies, according to multiple reports. Most notably, it continues to hold a stake in Anthropic that\u2019s right now valued at $5 billion, according to Bloomberg, and which many would view as an asset that continues to appreciate. Indeed, Anthropic was last valued at $965 billion in a Series H round in May, and it\u2019s expected to go public as soon as October<\/a>, potentially at an even higher valuation<\/a>. It\u2019s conceivable that a windfall from the sale of those shares could offset some of the hedge fund\u2019s public-market losses.<\/p>\n Other private investments in the portfolio of Situational Awareness include chipmaker MatX<\/a> and AI data center startup Fluidstack, which was reportedly in talks in April to raise a new round at an $18 billion valuation<\/a>.<\/p>\n TechCrunch has reached out to Aschenbrenner for comment.<\/p>\n<\/div>\n When you purchase through links in our articles, we may earn a small commission<\/a>. This doesn\u2019t affect our editorial independence.<\/em><\/p>\n