All articles tagged with #hedge fund
The SEC has subpoenaed several major Wall Street lenders to learn more about AI-focused hedge fund Situational Awareness, seeking details on its trades, use of leverage and lender communications after the fund unwound heavily levered public equity bets in July; Citadel reportedly bought much of the risk, and regulators emphasize that inquiries can occur without implying wrongdoing or enforcement action.
Citadel says it has unwound more than 80% of the risk from the Situational Awareness portfolio after purchasing assets from Leopold Aschenbrenner’s hedge fund, executing over 100 block trades totaling more than $4 billion. The Wellington multi-strategy fund rose 5.94% in July, its best month since 2022, as the AI‑driven positions that had pressured stocks like SanDisk and Bloom Energy began to rebound following the asset transfer.
Leopold Aschenbrenner’s Situational Awareness fund—once a high-flying AI-focused juggernaut that grew from under $4B to about $45B—lost billions in July as SanDisk, Micron, Bloom Energy and other AI-linked chip bets collapsed, triggering margin calls and a fire sale to Citadel’s Ken Griffin. The blowups wiped roughly 67% off the fund’s value in a single month, shrinking the portfolio to around $10B even as the year-to-date performance remained strong; Aschenbrenner, a former OpenAI researcher nicknamed the “Nostradamus of AI,” had pivoted to AGI-focused bets, but the risky chip stock wagers precipitated a dramatic implosion just days before his lavish California wedding.
Bill Ackman’s Pershing Square, managing about $35B with roughly 48 staff, keeps a culture where every employee—from cleaners to receptionists—owns multimillion-dollar stock in the firm, a policy Ackman says fuels loyalty with strong benefits, office-based work most of the year, and flexible summer arrangements.
Leopold Aschenbrenner, the so‑called ’Nostradamus of AI,’ is making another bold move by investing $400 million in a private company just days after his Situational Awareness hedge fund suffered a July blow‑up and dumped much of its public holdings. The fund has cut leverage, still controls billions in assets including a large stake in Anthropic, and remains profitable for the year thanks to strong first‑half gains as it navigates liquidity and risk amid ongoing market scrutiny.
Stock futures rose as July closed with a mixed tone and investors await Friday’s jobs data and more earnings; Big Tech showed a split in leadership with Alphabet, Amazon and Microsoft rallying while Apple and Meta pulled back, and oil movements followed political headlines after Trump paused Iran strikes. The Morning Squawk highlights five themes for the week: rising AI/cybersecurity risk following a Hugging Face/OpenAI incident, the collapse of the Situational Awareness hedge fund, Best Buy’s plan for smaller-format stores, and airfare staying elevated even if fuel costs stabilize, all ahead of a packed earnings calendar.
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.
Leopold Aschenbrenner’s AI-focused hedge fund Situational Awareness suffered a 67% drawdown in July as AI stocks slumped. To protect investors, the fund sold part of its public book, removed leverage, and now runs a fully paid-for public portfolio while keeping private positions. The fund, which had swelled to about $45B before the drop, is still up roughly 80% for the year and remains invested in Anthropic. Aschenbrenner promises to learn from the episode, implement risk and portfolio-management changes, and is available for 1:1 investor calls next week.
When rivals faced catastrophic AI-stock losses, Citadel founder Ken Griffin stepped in to salvage California hedge fund Situational Awareness after its July portfolio fell 67% and the firm unwound most of its $16 billion public-equities book. Griffin and his team reviewed positions overnight and ended up purchasing a chunk of the book, continuing Citadel’s pattern of stepping in during market stress.
Leopold Aschenbrenner’s AI-focused hedge fund Situational Awareness collapsed after margin calls forced a distressed sale of its public holdings to Ken Griffin’s Citadel, wiping out roughly $35 billion from a peak near $45 billion. Prime brokers Bank of America, Goldman Sachs, and JPMorgan Chase helped meet margin requirements as the fund’s leveraged positions were dumped, with as much as 400% leverage cited. The portfolio included AI infrastructure bets and private stakes like Anthropic, Nebius Group, Sandisk, Micron, and CoreWeave; the fund had posted outsized gains since its 2024 inception but investors warned of trouble, and the crash occurred as founder Leopold Aschenbrenner, 25, was preparing to marry Avital Balwit.
Leopold Aschenbrenner, a former OpenAI researcher who launched the AI-themed hedge fund Situational Awareness, saw its assets peak at about $45 billion before a market downturn forced a liquidation of levered bets—selling public AI names like SK Hynix and CoreWeave to Citadel at a discount and shrinking holdings to roughly $10 billion. The piece traces his meteoric rise, controversial background (FTX ties, OpenAI security memo, and Effective Altruism), and the volatility of AI-driven investing.
Situational Awareness, the hedge fund led by Leopold Aschenbrenner, is unwinding many trades and could be forced to liquidate assets after steep losses in AI infrastructure stocks and a poor bet against software names like Adobe. Prime brokers are helping the fund meet margin requirements and reduce positions, while the firm seeks liquidity by marketing stakes in private companies, including Anthropic. Its largest Q1 holdings—Nebius Group, SanDisk, Micron, and CoreWeave—have each fallen more than 35% this month, underscoring the fragility of the AI investing thesis that propelled the fund.
Situational Awareness, a $20bn hedge fund led by former OpenAI employee Leopold Aschenbrenner, is trying to raise fresh capital after a sharp AI stock rout eroded its gains. The fund has held ad hoc talks with existing investors and lenders and even offered some investors the option to buy assets, in a bid to shore up liquidity following a period of highly leveraged, high‑volatility performance that had earlier produced outsized returns. Aschenbrenner, who left OpenAI in 2024, built a following in Silicon Valley and counts Stripe co‑founders and Jane Street among early backers. The fund’s large holdings like Oracle and AMD have fallen, underscoring the broader Tech/AI market pullback, with Anthropic’s IPO rumored as a potential catalyst for a rebound.
Former Dragon Age producer Mark Darrah argues Dragon Age may have no clear future at BioWare as EA’s vast IP portfolio and focus on ongoing franchises complicate any Dragon Age revival, describing EA as a hedge fund with a video game hobby. He points to Veilguard's underwhelming sales and the publisher’s strategic priorities, with Saudi-backed investors looming as EA closes its leveraged buyout, casting doubt on BioWare’s ability to return to form.
CBC reports, via StubHub’s IPO filings, that CEO Eric Baker is a major stakeholder in Andro Capital, a hedge fund funding large-scale ticket purchases and providing seller financing through Colloquy LLC, effectively intertwining StubHub with scalping operations and raising concerns about price inflation and consumer harm; StubHub says it’s merely a tech platform, but the disclosures suggest closer ties to scalpers and warrant scrutiny.