The loss of Situational Awareness, the 24-year-old artificial intelligence hedge fund started by a former OpenAI employee, has left investors $35 billion out of pocket. After several bad weeks in the AI stock market, the fund sold its entire public stock portfolio to Ken Griffin’s Citadel.
Initially valued at $45 billion at the start of July, Situational Awareness is now worth just $10 billion, making it the largest trading loss of all time. The fund’s largest holdings included Nebius Group, Sandisk, Micron and CoreWeave, all of which have seen significant drops in value this month.
The fund was named after essays by Leopold Aschenbrenner, a 24-year-old who claimed that artificial general intelligence would arrive by 2025. These essays were so well-received that they attracted investors including Patrick and John Collison of Stripe, Sam Bankman-Fried’s Jane Street, and even Ivanka Trump.
Aschenbrenner’s claims of having a “brain trust on AI” and being able to provide “situational awareness” proved to be illusory. His fund’s failure raises questions about the impact of social proof in attracting investment, particularly from Silicon Valley elites.
