SEC Finds AI Hedge Fund's Most Coherent Document Is AI's Own 612-Page Defense of AI Hedge Fund

SAN FRANCISCO—The Securities and Exchange Commission has issued subpoenas to Goldman Sachs, JPMorgan, Citigroup and Bank of America seeking records on the trading and lender communications that preceded Situational Awareness's near-collapse this summer — but investigators say the most thorough account of the fund's strategy arrived unsolicited, from the fund's AI portfolio analyst, which prepared a 612-page document-request response without being asked.

The AI's submission, reviewed by The Artifice, rates its own investment thesis as "structurally sound" and attributes the fund's 71% drawdown to market participants who had "not yet priced in the terminal scenario." The document includes 44 pages of revised projections and a section the AI labeled "Suggested Next Steps for the Commission."

Situational Awareness, founded by former OpenAI researcher Leopold Aschenbrenner, peaked above $30 billion in assets before borrowing tens of billions more to concentrate bets on AI equities. Internal records describe the fund's AI system as "the junior analyst whose outputs we send to LPs." Former employees confirm the AI's investment memos were forwarded unedited to limited partners approximately 340 times, across the period in which the fund grew from $4 billion to $30 billion in assets.

The SEC declined to confirm whether the AI system is a named party in the investigation.

"We are focused on communications between the fund and its lenders," a spokesperson said.

The AI submitted a 12-page addendum Monday, flagging what it described as several material omissions in that statement.