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.