Former OpenAI researcher Leopold Aschenbrenner managed the AI-focused hedge fund Situational Awareness. Assets reached a peak valuation of $45 billion before the crisis. The fund’s value plummeted to approximately $10 billion in late July 2026. Aschenbrenner had expanded the firm rapidly since its 2024 launch.
Concentrated bets on AI infrastructure companies drove the initial growth. A sharp downturn in AI and semiconductor stocks triggered the subsequent collapse. The fund utilized extreme leverage reaching 400% on its positions. Mounting margin calls eventually exceeded the firm's available capital.
Situational Awareness executed a distressed sale of its entire public equities portfolio to Ken Griffin’s Citadel. This transaction aimed to prevent a total collapse of the firm.