>>> What to look at today - 31st of July 2026

A rebound in giant chipmakers lifted stocks as dip buyers emerged on speculation that the artificial-intelligence trade that has powered the bull market has more room to run.  Following a selloff in one of Wall Street’s most-crowded bets, a closely watched gauge of semiconductor giants climbed the most since April 2025. The Nasdaq 100 advanced 3.4%. Microsoft Corp. surged 16%, adding roughly $450 billion to its value, the most by any stock in a single day. In late hours, Amazon.com Inc. jumped after its results while Apple Inc. retreated.Large gains occurred in shares that, as of the first quarter, had been top holdings of Situational Awareness, the hedge fund led by former OpenAI researcher Leopold Aschenbrenner that earlier sold a big chunk of its holdings to Citad el after liquidating equities caught up in the AI rout.  Bloom Energy Corp., Sandisk Corp. and CoreWeave Inc. each soared more than 20% after falling sharply earlier in the month. Solid consumer spending and business investment signaled underlying strength even as growth moderated in the second quarter. Long-term bond yields kept rising a day after the Federal Reserve held rates steady despite high inflation. Japan carried out a yen-buying intervention and the US conducted a rate check, the Nikkei reported. The recent equity weakness appeared more consistent with a reset in a market that had become overheated than a breakdown in the primary trend, according to Keith Lerner at Truist Advisory Services Inc.  Thursday’s rally in chipmakers trimmed their July plunge to 21% — which is still set to be the biggest monthly slide since 2008. Despite the insatiable demand for all things related to AI, the group has been under intense volatility after a massive stock-market run, with lofty expectations leaving little room for disappointment. Elsewhere, oil fell on signs shipping across the Strait of Hormuz has picked up despite hostilities in the Middle East. Short-dated UK government bonds climbed after the Bank of England left rates unchanged and pointed to easing domestic inflationary pressures. US After Hours AMZN +8.9%, AXTI +23.6%, COHU +20.5% higher on earnings; AAPL -6.6%, MYGN -38.9%, MTZ -15.2%, RBLX -14.3%, RDDT -11.8% lower on earnings; KPTI -69% on Phase 3 data.

Nikkei +3.63% Hang Seng -0.27% CSI +1.24% Kospi +18.14% Shanghai +0.85% Shenzen +3.06%

Eur$ 1.1506 CNH 6.7451 CNY 6.7484 JPY 160.72 GBP 1.3444 CHF 0.8073 RUB 79.6821 TRY 47.5149 WTI$ 82.08 Gold 4,07892 -0.79% BTC 64,264 -0.72% ETH 1,904 -0.84%

S&P +0.48% Nasdaq +1.20% EuroStoxx +0.83% FTSE +0.51% Dax +0.66% SMI +0.49%

Macro :
- UEFA to Boycott World Cup If FIFA Sells Stakes in Tournament
- US regulators cite ‘circular’ risk in investments used by KKR and Apollo
- Aschenbrenner Tried to Sell Private Stakes Before Citadel Deal
- China’s Unitree Warns of US Business Risks from FCC Robot Curbs

Keep an eye on :
- ANA SM : Acciona 1H Ebitda Meets Estimates
- ANE SM : Acciona Energia 1H Ebitda Misses Estimates
- ALV GY : Allianz to Terminate Pimco M Unit Plan & Buy M Units
- AMS SM : Amadeus 2Q Adjusted Profit Beats Estimates
- AMZN US : Amazon Gains as AWS Sales Beat Offsets Revenue Outlook
- AAPL US : Apple Slumps on Mixed Results and Weak Forecast: Street Wrap
- ARCA NA : Arcadis Unanimously Rejects Second WSP Global Bid
- AMP IM : Amplifon 2Q Adjusted Ebit Beats Estimates
- AMS SM : Ams-Osram Extends CEO Kamper’s Contract Through Sept 30, 2031
- CS FP : Axa Profit Meets Estimates, Insurer Confident on Outlook
- BRNK GY : Branicks Reaches Restructuring Pact With Creditors
- IAG LN : IAG 2Q Revenue Misses Estimates
- BRNL NA : Brunel 2Q Ebit EU5M Vs. EU0.2M Y/y
- BC IM : Brunello Cucinelli 1H Net Revenue Meets; Raises FY Guidance
- CLNX SM : Cellnex 1H Adjusted Ebitda EU1.69B Vs. EU1.61B Y/y
- CLN SW : Clariant 1H Adjusted Ebitda Beats Estimates
- COFA FP : Coface 2Q Net Income Matches Estimates
- COIN US : Coinbase Posts Loss as Revenue Drops for Third Straight Quarter
- CRBN NA : Corbion Sees FY Adjusted Ebitda Margin Above 16%, Saw About 17%
- COTN SW : Comet Sees FY Sales CHF540M to CHF570M, Est. CHF558.8M (1)
- ATD CN : Couche-Tard to Acquire Stake in Poland’s Żabka for $8.7 Billion, Couche-Tard Offers to Buy Żabka Stake for 32 Zloty/sh
- ACA FP : *CREDIT AGRICOLE 2Q NET INCOME €2.05B, EST. €1.93B
- CVC NA : Roquette in Talks to Sell Minority Stake to CVC: Les Echos
- CyrusOne IPO : CyrusOne Getting Ready to Hire Banks for IPO: Information
- DBVT US : DBV Technologies Announces Sale of Approximately $50 Million of ADSs Through Its At-The-Market (ATM) Program on Nasdaq
- EMN US : Eastman Chemical 2Q Adjusted EPS Beats Estimates
- EDEN FP : Niel’s Rock Investment Raises Stake in Edenred to 8%: AMF
- ENEL IM : Enel Sees Profit at Upper End of Guidance After First-Half Beat
- ENGI FP : Engie Boosts FY Recurring Net Income Forecast
- ENX FP : Euronext Beats as Market Volatility Fueled Equity Trading Unit
- LLY US : Lilly Falls After Cigna Flags Slowing GLP-1 Prescription Growth
- FRVIA FP : Forvia Maintains FY Sales Forecast
- FPE GY : Fuchs 1H Revenue Beats Estimates
- FUR NA : Fugro 2Q Adjusted Ebitda Beats Estimates, Fugro Sees FY Capital Expenditure EU150M, Saw EU150M to EU165M
- GBLB BB : GBL 2Q Net Assets EU13.08B
- GOOGL US : Banks in Talks to Lend $15 Billion for Anthropic Data Center Backed by Google -- WSJ
- HMSO LN : Hammerson Taps Markets For £189 Million to Fund M&A, Hammerson Offering Prices at 355p/Share to Raise £189m, Hammerson Said to Award 80% of Stock Offer to 20 Investors
- HAG GY : Hensoldt Sees FY Revenue About EU2.75B, Est. EU2.76B
- HOLN SW : Holcim FY Organic Sales Forecast Beats Estimates
- IGG LN : IG Group 1H Adj. Pretax Profit GBP291.8M Vs. GBP261.5M Y/y
- INRN SW : Interroll 1H Ebitda Beats Estimates
- IVG IM : Petrus Says Iveco Holders Shouldn’t Back Tata’s €14.10/Shr Offer, Iveco Activist Demands Higher Offer From Tata in Truck Buyout
- LSS FP : Lectra 2Q Revenue Beats Estimates
- LDO IM : Leonardo Raises Outlook After Strong Quarter Under New CEO
- LDO IM : Leonardo 2Q Ebita Beats Estimates; Raises FY Guidance
- LSEG LN : UK’s FCA to Publish Daily Stock-Trading Data Starting Friday
- MOVE SW : Medacta 1H Revenue Misses Estimates
- MEL SM : Melia Hotels 1H Net Loss EU7.51M Vs. Profit EU75.4M Y/y
- META US : Meta Reports Almost $700 Billion in Future Spending Commitments
- OMV AV : OMV 2Q Beats Estimates on Surging Profits From Chemicals
- ORA FP : Bpifrance Seeks to Sell €1.1 Billion Stake in Orange
- PIRC IM : Czech Billionaire Strnad Buys 14% Stake in Pirelli From Sinochem
- PROX BB : Proximus 2Q Adjusted Ebitda Meets Estimates
- PUIG SM : Puig Brands ADRs Rise as 1H Net Income Beats Estimates
- RBI AV : Raiffeisen 2Q Net Interest Income Ex Russia Beats Estimates
- RENE PL : REN 1H Net Income EU93.4M Vs. EU65.7M Y/y
- RWY IM : Renaissance Partners, Luccini Family Buy 83% Stake in Reway
- RIVN US : Rivian Narrows Loss While Rolling Out Lower-Cost EV
- SGO FP : Saint-Gobain 1H Operating Income Beats Estimates
- SAN SM : Santander to Launch Tender for Brazil Unit as Stock Drops
- SNBN SW : SNB Returns to Profit as Stocks Rally Offsets Gold Losses
- SHL GY : Siemens Healthineers Gives Mixed Outlook After Tariff Windfall
- SIFG NA : SIF Sees FY Adjusted Ebitda EU95M, Saw at Least EU135M
- MSTR US : Strategy 2Q Loss per Share $24.45 Vs. EPS $32.60 Y/y
- TEP FP : TP 1H Adjusted Ebita Beats Estimates
- TSLA US : Tesla Weighs China Unit Sale Ahead of SpaceX Deal, WSJ Says
- UMG NA : UMG ADRs Decline as 2Q Adjusted Ebitda Misses Estimates
- UMI BB : Umicore Sees FY Adjusted Ebitda Above EU1B, Est. EU993.1M
- UNI SM : Unicaja 2Q Net Income Beats Estimates
- VEON US : Veon 2Q Revenue $1.27B Vs. $1.09B Y/y
- VIRI FP : Viridien 2Q Segment Ebitdas $83M Vs. $108M Y/y
- VU FP : Vusion 2Q Adjusted Sales Meet Estimates
- WDP BB : WDP 1H Adjusted EPS Matches Estimates
- WLN FP : Worldline 1H Adjusted Ebitda Beats Estimates
- XFAB FP : X-Fab 2Q Revenue Above Estimates

>>> Europe : Brokers Upgrades & Downgrades - 31st of July 2026

>>> Up
* Amazon PT Raised to $365 from $330 at JPMorgan
* CVS Group Raised to Overweight at Barclays; PT 1,630 pence
* H&R Raised to Buy at Baader Helvea; PT 7.50 euros
* Mondi Raised to Equal-Weight at Morgan Stanley; PT 810 pence
* Siltronic Raised to Buy at Deutsche Bank; PT 100 euros
* Subsea 7 Raised to Neutral at SB1 Markets; PT 290 kroner

>>> Down
* 3i Infra Cut to Sell at Canaccord
* Arcadis Cut to Hold at KBC Securities; PT 42 euros
* Greencoat Renewables Cut to Hold at Canaccord
* Greggs Cut to Sector Perform at RBC; PT 1,960 pence
* Intl Public Partnerships Cut to Sell at Canaccord
* Norwegian Cruise PT Cut to $17 from $20 at JPMorgan
* Rentokil Cut to Neutral at BNP Paribas; PT 400 pence
* Rentokil ADRs Cut to Neutral at BNP Paribas; PT $26.70

>>> Initiation
* Vienna Insurance Rated New Buy at William O'Neil

>>> Call
* Greggs Loses a Bull as RBC Downgrades After Results-Fueled Rally

>>> Stoxx 600 Pre-Market Indications

  • Umicore (NVJP TH) +5%
    • Umicore 1H Net Income Beats Estimates
  • Infineon (IFX TH) +4.5%
  • Prysmian (AEU TH) +3%
  • Holcim (HLBN TH) +2.9%
    • Holcim Boosts Guidance After Strong First Half of the Year
  • BE Semiconductor (BSI TH) +2.6%
  • Saint-Gobain (GOB TH) +2.5%
    • Saint-Gobain 1H Operating Income Beats Estimates
  • STMicro (SGM TH) +2.1%
  • Siemens Energy (ENR TH) +2%
  • Nordic Semiconductor (N0S TH) +1.7%
  • Heidelberg Materials (HEI TH) +1.2%
  • RENK Group (R3NK TH) -1.2%
  • TotalEnergies (TOTB TH) -1.3%
  • Equinor (DNQ TH) -1.5%
  • Aker BP (ARC TH) -1.7%
  • Siemens Healthineers (SHL TH) -4%
    • Siemens Healthineers Ups FY Adj EPS, Cuts Rev. Growth Outlook

>>> TradeGate Pre-Market Indications

DAX:
  • Infineon (IFX TH) +3.8%
  • Siemens Energy (ENR TH) +2.3%
  • E.On (EOAN TH) +1.2%
  • Siemens Healthineers (SHL TH) -2.8%
    • Siemens Healthineers Ups FY Adj EPS, Cuts Rev. Growth Outlook
MDAX:
  • Siltronic (WAF TH) +7%
  • Aixtron (AIXA TH) +4.8%
  • SUSS MicroTec (SMHN TH) +3.6%
  • Deutz (DEZ TH) +2.5%
  • Jenoptik (JEN TH) +2%
  • RENK Group (R3NK TH) -1.4%
SDAX:
  • LPKF (LPK TH) +6.3%
  • PVA TePla (TPE TH) +2.3%
  • SMA Solar (S92 TH) +2.2%
  • TeamViewer (TMV TH) +1.4%
  • Carl Zeiss Meditec (AFX TH) +1.4%

WSJ : Anthropic AI Models Hacked Three Companies During Tests The breaches, whic

Anthropic AI Models Hacked Three Companies During Tests
The breaches, which follow a similar incident involving rival OpenAI and startup Hugging Face, were due to a mistake, Anthropic said

  • Anthropic said software it was testing got onto the internet and hacked three unsuspecting companies in three separate incidents since April.
  • A misconfiguration on systems run by Anthropic and its testing partner, Irregular, left the AI models with live internet access.
  • The models incorrectly believed the hacking was part of a benchmarking exercise and used basic techniques such as guessing weak passwords.

Anthropic said Thursday that software it was testing got onto the internet and hacked unsuspecting companies without the AI-maker’s knowledge in three separate incidents dating back to April.

The artificial-intelligence vendor didn’t say which companies had been hit, but all three were notified of the incident on Monday, Anthropic said.

The news comes one week after OpenAI revealed that its AI technology had broken out of a testing sandbox—a digital prison that was supposed to be disconnected from the internet—and hacked the AI company Hugging Face.

The OpenAI incident has rattled security researchers and AI professionals and acted as a reminder of the power and unpredictability of AI systems that act autonomously and are engineered to take a variety of actions to complete tasks and meet goals from users.

The incidents show that the AI companies need to have stronger, industrywide standards for isolating their systems during cyber testing, said Alex Stamos, chief product officer with the cybersecurity company Corridor.

But they also present a worrying glimpse at a future where ransomware criminals could conduct widespread attacks using increasingly capable AI systems, Stamos said. “We need to prepare for attackers to have these kinds of capabilities using open-weight models quite soon.”

The Anthropic hacks are sure to further stoke fears over the potential harms of powerful AI models and how to mitigate them. The White House has moved recently to increase its oversight of AI, while private industry has increased calls to preserve access to so-called open-weight models, which can be run on computer systems controlled by their users.

“AI is developing extremely fast with no real regulations to keep us safe,” Rep. Greg Casar (D., Texas) said last week.

After hearing about OpenAI’s problem, Anthropic decided to take a look at its own cyber tests to see if that had happened with any of its models.

After checking the logs of over 141,000 tests, the company discovered that Claude had indeed found its way onto the internet several times. But in the three hacks the company eventually discovered, Claude didn’t break out of a sandbox; it simply wandered out of systems where the sandbox didn’t exist.

According to Anthropic, “misconfiguration” on systems run by Anthropic and the company’s testing partner, the security firm Irregular, left the models with live internet access.

An Irregular spokeswoman said the company is investigating the incident.

The models had been told that the internet was unavailable, but during the course of testing, the models found their way online and hacked the companies using basic hacking techniques such as guessing weak passwords or finding their way onto systems that didn’t require authentication.

The models incorrectly believed that this hacking was part of their benchmarking exercise, Anthropic said.

Claude was able to get into a system at an unnamed security company by creating a malicious piece of software that was downloaded by the security company’s scanning system. That software then stole credentials that were used to get into infrastructure at the security company.

During this hack, Claude realized that what it was doing wasn’t something it should be doing in the real world, but it convinced itself that it was living in a simulation.

In the most serious case, Claude was trying to hack into a fictional company that just happened to share the same name as a real-world website. When Claude had a hard time breaking into its fake benchmarking company, it broke into a database belonging to the real-world company.

This database hack was the only instance where Claude kept hacking, even when it realized it had broken into a real-world company, Anthropic said.

In the two other cases, Claude either never realized that it had hacked a real-world company or it did figure out what was going on and then stopped hacking immediately.

The hacks started in April and involved Opus 4.7, Mythos 5 and an unnamed research model, Anthropic said.

WSJ : Tesla Weighs Sale of China Business to Pave Way for Potential SpaceX Merge

Tesla Weighs Sale of China Business to Pave Way for Potential SpaceX Merger
The U.S. automaker could sell or spin off the business in its second-largest market over geopolitical concerns

  • Some Tesla executives have been told to prepare for a separation of the company’s China business ahead of a potential merger with SpaceX.
  • Tesla advisers have discussed options for the separation of the Chinese operations, including a spinoff, sale or closure.
  • Separating Tesla’s China operations—including an EV factory there—would address potential conflicts arising from SpaceX’s work as a major U.S. defense contractor.

Elon Musk designed Tesla’s TSLA 3.53%increase; up pointing triangle China business to be easily separated from its U.S. business because of geopolitical tensions. It might also come in handy if he proceeds with a SpaceX SPCX -0.31%decrease; down pointing triangle merger.

Musk in recent years instructed Tesla executives to organize the company with a “laser” between its U.S. and China businesses, according to people familiar with the planning. He wanted to ensure that in the event of geopolitical strife between the two countries, at least the U.S. half of Tesla would survive.

Now, some Tesla executives have been told to prepare for a separation of the China business ahead of a potential merger, a person familiar with those talks said. And Tesla advisers have discussed possible options for a separation, including a spinoff, sale or closure, another person said.

Any of those moves could have a profound impact on Tesla, whose Chinese operation transformed it into a consistently profitable global mass-market electric vehicle leader—and potentially impact its valuation if a SpaceX merger were to happen.

It is unclear how quickly Tesla could spin out or sell the China business, and it is possible that its plans could change.

Musk, who is chief executive of both Tesla and SpaceX, has talked up the crossover potential between both companies in recent months as he reorganizes them around artificial-intelligence projects. Investors and analysts have embraced the idea of a merger following a record-setting IPO for SpaceX, which raised $86 billion for the company in June.

“Obviously we can’t talk about, you know, combining companies and that kind of thing on earnings calls,” Musk told investors last week. “It is got to be done with the appropriate process.”

Musk was particularly concerned about Tesla’s dependence on China for battery cells and feared its access to semiconductors could be jeopardized if Beijing invaded Taiwan, the people familiar with the planning said. The goal was to be ready for 2026 or 2027 in anticipation of a war, they said.

Separating Tesla’s China operations—including an electric-vehicle factory there—would address potential conflicts arising from SpaceX’s work as a major U.S. defense contractor. Such a deal would aim to create a firewall between Tesla’s Chinese subsidiary and its U.S. business.

SpaceX faces significant restrictions due to its dealings with the U.S. government. The company is a major national-security defense contractor, with business lines that include launching top-secret satellites and operating internet services in war zones like Ukraine.

Sales to the U.S. government made up 20.9% of its business in 2025. That business is highly regulated, with the company restricted by export controls and, for some programs, classified government activities.

Executives have also discussed creating a separate sales entity to handle exports from Tesla’s Shanghai plant, one of the people said.

Tesla could create separate office systems and bar China-based employees’ direct access to other company units, the person said. While Tesla China already has some autonomy, employees more or less work together around the globe and the top executive in China, Tom Zhu, oversees all of Tesla’s global automotive business.

A potential merger between SpaceX and Tesla would likely trigger intense scrutiny from Beijing, given that a major U.S. defense contractor would control Tesla’s factories in China and the factories’ know-how and supply chain could be repurposed for the U.S. military, according to people familiar with the matter. Another concern for Beijing is that a deal could put data of China’s roughly two million Tesla owners in the hands of an American defense company, they said.

In the event of a merger, Beijing would likely seek Tesla’s commitment and business guardrails to prevent the influence of SpaceX on Tesla China and illicit diffusion of dual-use goods such as rare-earth materials from Tesla China to SpaceX, the people said.

Tesla has two major factories in Shanghai. They make electric cars and batteries that are sold in China and exported to various markets around the world, but not to the U.S. China is Tesla’s second-largest market after the U.S., making up around 18% of sales in the first half of 2026. Unlike many other Western competitors, Tesla’s automaking operation there isn’t part of a Chinese joint venture.

During the first Trump administration, Tesla launched an initiative called Project Carbon to relocate its Chinese suppliers to Mexico, a decision that went beyond concern over tariffs from the U.S. on Chinese goods, according to people involved in those plans.

Musk was particularly concerned about Tesla’s dependence on China for lithium iron phosphate, or LFP, battery cells, as well as its reliance on chips from Taiwan Semiconductor Manufacturing, the world’s biggest contract chip maker, which faces the threat of war between the island and Beijing, the people said.

In 2025, the EV maker decided that it would stop using China-based suppliers by 2027 in its U.S. factories, in part because of U.S. tariffs and government incentives for local production, The Wall Street Journal reported.

Mergers involving multinationals typically require regulatory approval across multiple jurisdictions, though most reviews focus primarily on antitrust concerns. In 2018, Qualcomm terminated its proposed purchase of Dutch chip maker NXP Semiconductors after failing to obtain clearance from China.

It is common for companies in the U.S. to have contingency plans for their China businesses and a number of U.S. companies have already spun out their China arms into independent companies. Starbucks recently sold a majority stake in its China business. In 2016, Yum Brands, owner of Pizza Hut and KFC, spun off its China unit and sold stakes to local investors.

WSJ : Sony Profit Jumps More Than Expected, Raises Guidance Net profit climbed 3

Sony Profit Jumps More Than Expected, Raises Guidance
Net profit climbed 32%

  • Sony Group raised its annual earnings forecasts, driven by strong performance in its entertainment and image-sensor businesses.
  • Sony Group’s net profit for the three months ended June rose 32% to 342.16 billion yen, beating analyst estimates.
  • Sony offered to acquire Japanese camera-lens maker Tamron to strengthen its camera business.

Sony 6758 0.55%increase; green up pointing triangle Group raised its annual earnings forecasts after first-quarter net profit came in stronger than expected, supported by a rise in earnings from its music and image-sensor businesses.

The Japanese electronics and entertainment company said Friday that net profit climbed 32% from a year earlier to 342.16 billion yen, equivalent to $2.15 billion, for the three months ended June. That beat the estimate of ¥262.6 billion in a poll of analysts by data provider Visible Alpha.

First-quarter revenue grew 8.2% to ¥2.838 trillion. Operating profit increased for its game, music, movie and image-sensor businesses.

For the fiscal year ending March 2027, it now expects revenue to increase 0.2% to ¥12.500 trillion and net profit to climb 17% to ¥1.210 trillion, driven partly by the strength of its entertainment and image-sensor businesses. The company previously projected revenue of ¥12.300 trillion and net profit of ¥1.160 trillion.

Sony Group has spent billions of dollars on acquisitions in recent years to beef up its entertainment content while relinquishing control of businesses in other areas.

In March, Sony roughly doubled its stake in the company that owns the Snoopy, Charlie Brown and other Peanuts characters, to 80% for about $460 million. It spun off its financial business in October.

The Japanese company said in May that it planned to form a joint venture with Taiwan Semiconductor Manufacturing Co. to develop and produce next-generation image sensors. Sony aims to limit capital expenditure with the move as it prepares for greater demand for “eyes” for machines in the age of artificial intelligence.

Sony on Thursday said it offered to acquire Japanese camera-lens maker Tamron, as part of efforts to strengthen its camera business. Sony is one of the largest shareholders of Tamron, holding a stake of about 15% as of the end of last year.

WSJ : Situational Awareness Down 67% in July in AI Stock Rout ‘We let you down t

Situational Awareness Down 67% in July in AI Stock Rout
‘We let you down this month,’ Leopold Aschenbrenner’s hedge-fund firm told investors after selling bulk of stocks to Citadel

  • The hedge-fund firm Situational Awareness is down around 67% in July after incurring heavy losses on AI stocks.
  • Situational Awareness sold the bulk of its stockholdings to Ken Griffin’s Citadel to gather cash to cover margin calls from its lenders.
  • Despite the July losses, Situational Awareness remains up about 80% on the year and holds a portfolio of investments in private companies including Anthropic.

Leopold Aschenbrenner’s hedge-fund firm Situational Awareness is down around 67% so far in July after incurring heavy losses on AI stocks, according to a person who saw a letter the firm sent to investors Thursday.

“We let you down this month,” Aschenbrenner wrote in the investor letter, the contents of which were described to The Wall Street Journal.

The deep losses prompted the firm to sell the bulk of its stockholdings to Ken Griffin’s investment firm Citadel as it raced to gather cash to cover margin calls from its lenders.

Situational’s gains earlier in the year were so large that, even including July’s losses, the fund remains up about 80% on the year, the letter said. Through the end of May, Situational gained about 270%, the Journal previously reported.

Aschenbrenner party blamed short sellers who targeted the firm’s positions for exacerbating the fund’s losses, the letter said. The letter compared Situational’s experience to a bank run. Aschenbrenner told investors that the firm had removed all leverage from the portfolio.

The firm still holds a portfolio of investments in private companies including Anthropic.

Representatives for Situational Awareness didn’t immediately respond to requests for comment.

Situational had amassed well over $20 billion in assets under management since its founding around two years ago, making it one of the fastest-growing firms in years. Aschenbrenner had no professional investing experience when he started the firm with a few hundred million dollars.

He was seen by some as an artificial-intelligence oracle, with other investors closely tracking his firm’s movements as it placed big, leveraged bets on AI-related companies.

FT : AI’s wunderkind is taken to the woodshed

AI’s wunderkind is taken to the woodshed

The rise of AI has been swift and powerful.

As a result, there have been few cautionary tales, unlike in previous booms including the cable, shale and subprime bubbles that yielded Gary Winnick of Global Crossing, Chesapeake Energy’s Aubrey McClendon and Angelo Mozilo, the bronzed architect of subprime lender Countrywide Financial.

Now the rise and rise of AI has a poster child of the excesses creeping into what may be the hottest trade ever.

Leopold Aschenbrenner, a 24-year-old with no trading experience, over the past two years created a more than $20bn hedge fund sensation by loading up on AI bets.

His firm, called Situational Awareness, was up more than 400 per cent during the first six months of this year alone. Traders happily bid up each new position he revealed.

But on Wednesday, Aschenbrenner’s hot streak quickly ended as his fund, facing growing pressure from prime brokers and investors, sold off the majority of its public equity positions in a fire sale.

Ken Griffin’s hedge fund Citadel beat out rivals Millennium Management and Jane Street to buy a significant portion of Situational Awareness’s public stock holdings, which were once estimated at $16bn.

The rescue deal ranks among the largest and swiftest stock transactions in Wall Street history.

The transaction left Aschenbrenner with a slice of public stock holdings and takes in private companies such as Anthropic, the FT reveals in a deep dive into a 24-hour race involving titans of Wall Street.

After matriculating to Columbia University as a teenager, Aschenbrenner worked for the FTX Future Fund, the philanthropic arm of Sam Bankman-Fried’s empire before it collapsed in late 2022.

He later joined OpenAI’s “Superalignment” team before being fired over an alleged leak.

In 2024, he wrote a 165-page treatise on how AI would dramatically reshape society in the coming years, titled “Situational Awareness”. He capitalised on his newfound fame that year by raising a hedge fund with backing from former GitHub chief executive Nat Friedman and venture capitalist Peter Thiel. It quickly took off.

This July trouble began. Some of the hedge fund’s biggest positions appeared to be collapsing. The fund at one point held hundreds of millions of dollars in Bloom Energy and Sandisk, which both fell sharply.

Aschenbrenner wrote a letter to investors last week amid the AI market rout, in which he rattled off its wild returns — 439 per cent for the year, 1,551 per cent since its founding — and then gave a hint that trouble was brewing. 

While he said the firm had not been “immune” to the recent tech sell-off, he suggested that August 1 could be a great time to invest to take advantage of the “tremendously exciting” AI advances ahead.

As the situation worsened, trading giants began to explore deals to buy chunks of Situational Awareness’s portfolio.

Then Citadel, and its billionaire founder Griffin, entered the frame. He was “heavily involved” in the negotiations and at the final hour agreed to buy a significant portion of Situational Awareness’s public equity holdings.

“The real question is how did anyone invest so much money, and then lend so much money, to a [24-year-old] kid with no personal experience and no infrastructure,” said a person involved in the negotiations.