The hedge fund founded by former OpenAI researcher Leopold Aschenbrenner is unwinding many of its trades after big losses on artificial intelligence stocks and a bad bet against software stocks, according to people familiar with the matter.
Prime brokers for the fund, Situational Awareness, have been rushing to raise cash to meet margin requirements, the people said. Ken Griffin's Citadel hedge fund reached a deal to buy the fund's publicly traded assets, according to people familiar with the deal. Situational Awareness has sustained significant losses in recent weeks as its portfolio of AI infrastructure investments such as SK Hynix declined while short positions in software companies such as Adobe moved sharply against it, the people said.
The fund grew to as big as $45 billion at the start of July before big losses took hold, according to a person familiar with the matter. Several of the firm's prime brokers — including Bank of America, Goldman Sachs and JPMorgan Chase — have been working with the fund as it seeks to meet margin requirements or reduce positions in an orderly fashion. The brokers have been marketing a group of the firm's holdings on both the long and short side for sale prior to Thursday's start of trading, according to people familiar with the situation.
The situation remains fluid, and it couldn't be determined whether the firm was satisfying its margin calls through the sales. The firm had been negotiating to sell its stake in Anthropic, but it wasn't clear if that deal was done. A spokesman for the firm said reports that it was marketing its Anthropic stake are not accurate.
The fund's largest holdings at the end of the first quarter included Nebius Group, Sandisk, Micron and CoreWeave, according to filings. All four of those stocks are down more than 35% this month.
