The hedge fund Situational Awareness LP, founded by Leopold Aschenbrenner, sold its entire portfolio of public stocks—both long and short positions—in one large transaction. The buyer was Ken Griffin's Citadel fund. Following the deal, Situational Awareness's assets dropped to approximately $10 billion.
Margin Calls and Forced Sell-off
According to sources familiar with the situation, at the beginning of July 2026, the fund's assets under management were valued at around $45 billion. In recent weeks, it suffered significant losses due to the decline in shares of companies related to artificial intelligence infrastructure, including SK Hynix, as well as adverse movements in its short positions on software stocks such as Adobe. The fund's prime brokers—Bank of America, Goldman Sachs, and JPMorgan Chase—demanded additional collateral to meet margin requirements, forcing the managers to sell off the public portfolio.
From Record Returns to Losses
Aschenbrenner launched Situational Awareness after leaving OpenAI in 2024. The fund quickly gained investor attention thanks to its high returns: a letter dated July 24, 2026, indicated a net return of 439% for the first half of 2026 and 1551% since the fund's inception.
Largest Holdings
As of the end of the first quarter of 2026 (per 13F filing data), the fund's portfolio included shares of:
- Nebius Group;
- Sandisk;
- Micron;
- CoreWeave.
In July 2026, all four stocks fell by more than 30–35%.
The fund retains its private investments, including a stake in Anthropic valued at approximately $5 billion, and will continue to operate as a private investment vehicle—now without a public portfolio.
Role of Citadel and Other Players
The transaction with Citadel closed around July 30–31, 2026, following negotiations that also involved other market players, including Millennium.
The outcome of the deal highlights the scale of the correction in the artificial intelligence infrastructure-related stock market and the risks of margin leverage for hedge funds betting on this sector. The future activities of Situational Awareness are now limited to its private holdings, including its stake in Anthropic, with no access to the public stock market.
AI Perspective
In terms of macroeconomic connections, the Situational Awareness case is reminiscent of the story of Archegos Capital Management, which in March 2021 failed to meet margin calls and triggered a sell-off of positions exceeding $20 billion—several large banks, including Nomura and Credit Suisse, incurred losses from trades with that fund at the time. The mechanism is similar: concentrated bets placed through multiple prime brokers create hidden systemic leverage, invisible to any single counterparty until a drop in stock prices triggers a chain reaction of margin calls.
A technical aspect the article does not address is the question of creditor priority. The Archegos experience demonstrates that banks that are the first to sell the positions of a troubled client minimize their own losses, while those who are late bear the brunt of the sell-off. In the current deal, the three prime brokers demanded collateral almost simultaneously, reducing the room for such maneuvering. Whether the private stake in Anthropic will remain isolated from the cascade risks of concentrated bets on AI infrastructure, or whether similar cases will become a regular feature of the cycle, is a question worth keeping in view.
