Leverage-Loaded AI Bets Crater Hedge Fund as AI Stocks Tank
New York Post reports that Situational Awareness, a hedge fund founded in 2024 by Leopold Aschenbrenner, used heavy leverage and options to bet on AI stocks. As AI stocks slid and the market cooled, the fund was forced to sell much of its portfolio to Citadel at a steep discount, leaving it down about 67% last month amid debt-fueled bets and criticisms of inexperience and risk-taking.