Goldman reaped more than $200mn in fees from hedge fund Situational Awareness
Barely two-year-old AI-focused investment firm became biggest client of Wall Street bank’s prime brokerage unit
AI hedge fund Situational Awareness became the biggest prime brokerage client at Goldman Sachs this year, underscoring the remarkable heft of a firm with little record before it suffered tens of billions of dollars in losses.
Goldman has earned more than $200mn in fees this year from lending to Situational Awareness, the most of any client in its prime brokerage business financing hedge funds, according to people familiar with the matter.
Leopold Aschenbrenner’s fund, which rose to prominence through a series of highly lucrative bets on AI, was one of the biggest overall clients of Goldman’s trading division this year, the people added.
It is virtually unheard of on Wall Street for a fund such as Situational Awareness, which is barely two years old, to so quickly become such a large client of an investment bank such as Goldman alongside blue-chip hedge funds including Citadel and Millennium.
The fees for Goldman have been so large because of the rapid growth of Aschenbrenner’s fund as well as the types of trades he was making.
Aschenbrenner, whose firm remains a client of Goldman, told his investors in July that he would no longer borrow money to magnify its bets. That would mean that future fees for Goldman would not be on the same scale as before the losses. Nevertheless, the fees it paid already this year stand to make Situational Awareness Goldman’s biggest hedge fund client for 2026 in its prime business.
Goldman and Situational Awareness declined to comment.
Aschenbrenner, a 24-year-old former OpenAI researcher with no trading experience, founded Situational Awareness in 2024 with a few hundred million dollars in assets, racking up returns of more than 400 per cent and growing the fund to more than $20bn.
However, Situational Awareness was caught out by a sudden sell-off in stocks exposed to the AI sector. His losses were amplified by debt he had borrowed from investment banks to make his trades.
Aschenbrenner ultimately sold most of its public-market positions, which were once estimated at $16bn, to Ken Griffin’s hedge fund Citadel.
Goldman has been one of the main lenders to Situational Awareness.
JPMorgan Chase was another lender to Situational Awareness but cut off its lending activity following the losses, the FT has reported. Situational Awareness remains a Goldman client, though Aschenbrenner has also recently started a trading relationship with tech-focused brokerage Clear Street.
After the asset sale to Citadel, Aschenbrenner said he would “fight another day” and “learn the necessary lessons”. Earlier this month he began taking new positions in technology stocks.
Aschenbrenner rose to prominence in Silicon Valley in 2024 when he published a 165-page essay titled “Situational Awareness” that predicted the profound impact AI would have on society. It helped earn him the nickname the “Nostradamus of AI” and helped him raise start-up capital for his new fund.