Leopold Aschenbrenner’s once-fast-rising AI hedge fund has been forced to retreat from public markets after the trade that powered its ascent turned sharply against it. Citadel has emerged as the buyer, stepping into an AI-infrastructure rout that tested the fund’s conviction—and its leverage.

Situational Awareness was founded in 2024 by Aschenbrenner, a former OpenAI researcher whose investment case rested on the enormous buildout needed to scale artificial intelligence: chips, computing power, memory and energy. The bet initially delivered spectacular gains, with the fund reportedly returning 439% through June and swelling to as much as $45 billion at its peak.¹

Then the market turned. Investors began questioning whether huge AI capital expenditures would translate into revenue soon enough, hammering infrastructure names including SK Hynix, Sandisk, Bloom Energy and Nebius. The fund’s use of borrowed money magnified the damage.¹

As recently as July 24, Aschenbrenner described the selloff as one of the strongest buying opportunities since early 2024 and sought fresh investor commitments. That appeal did not produce the capital he had hoped for, according to reporting cited by TechCrunch.¹

The unwind followed quickly. TechCrunch reported that Situational Awareness sold the majority of its public-stock portfolio to Ken Griffin’s Citadel.¹ Axios, citing a source, went further, reporting that the fund had sold all of its public equities portfolio—an apparent difference in the reported scope of the transaction, but not in its central message: the public-market AI bet was being dismantled.²

Citadel’s purchase also carries a more optimistic reading. Griffin’s firm already held some similar AI-infrastructure positions, suggesting it sees value in assets a leveraged rival could no longer comfortably hold.¹ Situational Awareness, meanwhile, has retained private investments, most notably an Anthropic stake reportedly valued at $5 billion—leaving Aschenbrenner with one large, illiquid bet still intact.¹