Leopold Aschenbrenner’s hedge fund is facing steep AI losses

The $24 billion hedge fund founded by former OpenAI researcher Leopold Aschenbrenner unwound all of its public stock holdings after big losses on artificial intelligence companies and a bad bet against software shares left it scrambling to raise cash, according to people familiar with the matter.

The fund exited all of their public investments through essentially one trade with another major hedge fund, the people said. Public equities owned on both the long side and short side represented about two-thirds of the total holdings for the firm.

Situational Awareness sustained significant losses in recent weeks as its portfolio of AI infrastructure investments such as SK Hynix declined while short positions in software companies such as Adobe moved sharply against it, the people said.

Several of the firm’s prime brokers — including Bank of America, Goldman Sachs and JPMorgan Chase —were working with the fund as it sought to meet margin requirements or reduce positions in an orderly fashion, according to people familiar with the discussions. The brokers were marketing a group of the firm’s holdings on both the long and short side for sale prior to Thursday’s start of trading, according to people familiar with the situation.

And now it appears they have found a buyer for the entire book. Situational Awareness will continue as a firm, but only has private holdings for now, the people said.

The fund has also been attempting to raise liquidity by marketing stakes in privately held companies, according to people familiar with the matter. Those efforts include an investment in Anthropic. The size of the position being offered couldn’t be determined, though people familiar with the process said prospective buyers had expressed interest in purchasing part or all of the stake.

Situational Awareness did not immediately respond to requests for comment.

The fund’s largest holdings at the end of the first quarter included Nebius Group, Sandisk, Micron and CoreWeave, according to filings. All four of those stocks are down more than 35% this month.

Aschenbrenner became prominent in technology and investing circles after publishing a series of essays in 2024 arguing that rapid advances in artificial intelligence would require an enormous expansion of computing power, advanced semiconductors, memory and energy infrastructure. Those ideas became the intellectual foundation for Situational Awareness after he left OpenAI.

Aschenbrenner graduated from Columbia University as valedictorian at the age of 19 before joining OpenAI’s Superalignment team. He was fired in 2024 over what the company described as an improper disclosure of internal information. Aschenbrenner has disputed that characterization, saying he shared a largely nonconfidential planning document with outside researchers for feedback, and has said his dismissal followed tensions over warnings he raised about OpenAI’s security practices. OpenAI has said those concerns were unrelated to his departure. 

Aschenbrenner is engaged to Avital Balwit, the chief of staff for Anthropic CEO Dario Amodei, according to an October profile in Fortune, which cited a Situational Awareness LP spokesperson.

The size of the fund’s losses and the amount it was seeking to raise couldn’t immediately be determined.