AI Star Leopold Aschenbrenner Built A $45 Billion Hedge Fund. Weeks Later It Has Been Forced To Unwind Bets

The hedge fund founded by former OpenAI researcher Leopold Aschenbrenner is rapidly unwinding many of its public stock positions after suffering steep losses tied to artificial intelligence investments and bearish bets against software companies.

Aschenbrenner's fund, Situational Awareness, has built its strategy around the expectation that the AI boom would drive sustained demand for chips, memory, data centers and electricity. However, a sharp selloff across many AI-related stocks over the past days has left the fund scrambling to meet margin requirements.

According to CNBC, several of Situational Awareness' prime brokers, including Bank of America, Goldman Sachs and JPMorgan Chase, have been working with the hedge fund to either raise cash or reduce positions in an orderly manner. The brokers were reportedly marketing a package of the firm's long and short equity holdings for sale before Thursday's trading session as part of the effort to stabilize the portfolio. Stocks rebounded sharply on Thursday's session, led by chupmakers.

People familiar with the matter told CNBC that a large investment firm has reached an agreement to purchase the fund's publicly traded assets, although the identity of the buyer has not been disclosed. It remains unclear whether the transaction is sufficient to satisfy the fund's margin obligations.

The losses were reportedly driven by declines in several AI infrastructure companies alongside short positions that moved sharply against the fund. Holdings linked to the artificial intelligence supply chain, including South Korean memory chip maker SK Hynix, fell significantly in recent weeks, while bearish wagers against software companies such as Adobe generated additional losses as those shares rallied.

The hedge fund had reportedly grown to approximately $45 billion at the beginning of July before the recent market downturn eroded the value of its portfolio. CNBC also reported that Situational Awareness had been negotiating to sell its stake in AI startup Anthropic, although a spokesperson for the firm denied reports that it was actively marketing those shares.

Regulatory filings show that the fund's largest publicly disclosed holdings at the end of the first quarter included Nebius Group, SanDisk, Micron and CoreWeave. According to CNBC, all four companies have lost more than 35% of their market value during the current month, underscoring the severity of the selloff across parts of the AI infrastructure sector.

Aschenbrenner rose to prominence in 2024 after publishing a series of widely read essays arguing that increasingly capable AI systems would require an unprecedented expansion of computing infrastructure.

His writings emphasized growing demand for advanced semiconductors, high-bandwidth memory, power generation and data centers, themes that became central to both AI investing and Situational Awareness' portfolio construction.

The 25-year-old investor followed an unconventional path into finance. After graduating as valedictorian from Columbia University at just 19 years old, he joined OpenAI's Superalignment team, which focused on long-term AI safety.

His tenure at OpenAI ended in 2024 after the company dismissed him over what it 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.

He has also argued that his dismissal followed disagreements over security concerns he raised about OpenAI, while the company has maintained those concerns were unrelated to his departure.

Beyond OpenAI, Aschenbrenner has remained closely connected to the AI industry. According to a Fortune profile, he is engaged to Avital Balwit, chief of staff to Anthropic CEO Dario Amodei. Earlier in his career, he also briefly worked at a philanthropically focused investment fund established by former FTX founder Sam Bankman-Fried.