Leopold Aschenbrenner’s AI hedge fund, Situational Awareness, sold most of its public stock portfolio to Citadel following sharp losses. The fund, which once managed $45 billion, saw its assets drop to $10 billion as AI infrastructure bets declined. While the fund exited its public positions, it maintains a $5 billion stake in the private company Anthropic.
Situational Awareness, the AI-focused hedge fund managed by Leopold Aschenbrenner, has divested the bulk of its publicly traded stock holdings to Ken Griffin’s Citadel. This move follows a period of intense volatility for the fund, which had recently gained attention for its rapid rise and specialized focus on the physical infrastructure required for large-scale artificial intelligence models.
Impact of Market Decline on AI Holdings
The fund’s rapid contraction highlights the risks associated with concentrated bets in the AI hardware and infrastructure sector. After reporting significant gains earlier in the year, the fund faced a sharp downturn as stocks within its portfolio—including SK Hynix, SanDisk, Bloom Energy, and Nebius Group—declined by more than 30% over the last month. The impact of these price drops was intensified by the fund’s use of borrowings, which accelerated the need for liquidation when asset values moved against its positions.
Following the sale to Citadel, the firm’s total assets under management have reportedly decreased from a peak of $45 billion to approximately $10 billion. Citadel’s acquisition is consistent with its established strategy of stepping in to acquire assets from institutional investors that are facing liquidity constraints or are forced to unwind leveraged positions.
Focus on Private Market Strategy
Despite exiting its public equity positions, Situational Awareness continues to hold significant interests in private companies. The most notable of these is a $5 billion stake in Anthropic, an AI research organization. Investors are currently monitoring the timeline for a potential initial public offering from Anthropic, which reports suggest could occur as early as October. This private holding remains a central part of the fund’s long-term strategy, potentially serving as a recovery mechanism for the capital lost in the public market downturn.
In addition to its Anthropic position, the fund remains invested in MatX, a semiconductor developer, and Fluidstack, which focuses on AI data center infrastructure. The performance of these private holdings will be the primary factor for the fund's future, as it no longer maintains the diversified public equity exposure that previously defined its investment thesis. Investors and market observers will likely continue to track updates regarding the fund’s remaining private assets and any potential future liquidity events related to these holdings.