Aschenbrenner's Situational Awareness sells AI book to Citadel

A 25-year-old former OpenAI researcher's hedge fund posted a 439% return in the first half of this year, then had to sell almost its entire public stock book to Ken Griffin's Citadel a few weeks later. That is the arc The Next Web reported for Leopold Aschenbrenner's Situational Awareness fund, which launched in 2024 with $225 million in initial backing, peaked around $45 billion in early July 2026, and now sits at roughly $10 billion after the forced liquidation.

The trade construction is what stings. The fund was long AI infrastructure — Nebius, SanDisk, Micron, SK Hynix, CoreWeave — and short software names including Adobe. When the infra side cracked, the pain hit both books at once: Nebius fell about 48% from peak, SanDisk about 56% in barely one month, and Adobe squeezed higher against the short. Prime brokers at Bank of America, Goldman Sachs, and JPMorgan asked for cash, and Citadel stepped in to take the bulk of the public equity portfolio, as Bloomberg reported.

What remains is a much smaller, much more concentrated vehicle. Situational Awareness keeps its private holdings, with an Anthropic stake valued at roughly $5 billion, and will carry on as what Bloomberg describes as essentially an Anthropic holding company with a hedge fund attached. The thesis Aschenbrenner laid out in his 165-page essay of the same name is not being retracted here; only the leveraged public-markets expression of it is being unwound.

The honest caveat is that we still don't know the specific leverage ratio Situational Awareness was running, the price Citadel paid for the block, or whether the sale was a steep discount or close to market. Those numbers will decide how much of this reads as a bad trade versus a survivable one that could not survive the margin desk's timing. What the reporting also doesn't give you is whether other AI-infra thematic funds are quietly facing the same call from the same three prime brokers.

The forward read: Citadel just picked up a large book of AI-infrastructure exposure at distressed pricing, and the prime brokers now have a very recent memo case for tightening leverage on any single-theme thematic fund. If you allocate on the AI compute-buildout conviction, the thesis probably still works; the trade construction is what needs a rethink.