Leopold Aschenbrenner hedge fund sells stock book amid margin pressure
Situational Awareness reportedly shrank from $45 billion to about $10 billion after an AI-stock selloff forced a sale to Citadel.
By Daniel Okafor · Business Editor
3 min read
Leopold Aschenbrenner’s hedge fund, Situational Awareness, sold its leveraged public-stock positions to Citadel after losses and margin pressure, CNBC reported, citing people familiar with the matter. The reported sale cut the fund’s holdings from a peak of $45 billion earlier in July to about $10 billion by Thursday, according to CNBC.
That is an approximate $35 billion, or 78%, fall in reported holdings. It does not establish an audited loss to investors or Aschenbrenner personally: the reports do not provide the fund’s net asset value, debt, derivatives exposure, sale proceeds or final margin status.
Why did Leopold Aschenbrenner’s hedge fund sell its stocks?
CNBC reported that falling AI-infrastructure shares and losses on short positions in software companies left the fund seeking cash. Its prime brokers were working with Situational Awareness either to meet margin requirements or reduce positions in an orderly way, CNBC said.
Leverage means a fund borrows or otherwise increases its market exposure beyond the capital it has put up. CNBC reported that Situational Awareness used leverage of up to 400%; when positions fall in value, lenders can demand more collateral, creating pressure to add cash or sell holdings.
CNBC said Citadel reached a deal to buy the fund’s publicly traded assets. The outlet reported that AI-related positions including SK Hynix declined, while short bets against software companies, including Adobe, moved against the fund. The Wall Street Journal separately reported that heavy borrowing left Aschenbrenner needing cash as his AI bets weakened, followed by sales to Citadel.
How Situational Awareness grew
Aschenbrenner launched the fund after leaving OpenAI in 2024, CNBC reported. His essays that year argued that more capable AI would require far greater computing capacity, advanced chips, memory and energy infrastructure, an investment case that became the basis for the fund.
CNBC, citing a Wall Street Journal report, said the fund had produced gains of more than 1,000% since inception before the recent decline. CNBC also reported that the fund had reached $45 billion at the start of July, according to a person familiar with the matter.
Its largest holdings at the end of the first quarter included Nebius, Sandisk, Micron and CoreWeave, according to filings cited by CNBC. CNBC said all four had fallen more than 35% during the month.
Before the Citadel transaction, roughly two-thirds of the portfolio consisted of public-equity long and short positions, while the rest was in private-company stakes dominated by a multibillion-dollar Anthropic investment, CNBC reported, citing one source. CNBC said it could not determine whether the stock sales fully met margin calls, the fund’s total losses or the amount of cash it sought.
The status of a possible Anthropic-stake sale was also unclear, CNBC reported. A spokesperson for the firm said reports that the stake was being marketed were inaccurate. Situational Awareness did not immediately respond to CNBC’s request for comment.
This story draws on original reporting from CNBC.