After Citadel Deal, Aschenbrenner's Fund Value Halved to $10B

Aschenbrenner, who previously worked as a researcher at OpenAI, shot to prominence in 2024 after writing an essay called "Situational Awareness" that highlighted the pace of AI development. He launched his hedge fund later that year, quickly amassing assets by investing heavily in AI-related equities and private startups. The fund's peak of $20 billion in late May 2026 marked a stunning ascent, but the broader sell-off in AI stocks this summer erased more than half its value within months. Despite the losses, the fund remains a major player thanks to its private holdings.

A Fast Fall From $20 Billion

The fund started selling off some of its equity holdings after incurring losses during the recent downturn in AI stocks, according to sources. Some of its largest positions continued to climb after late May before collapsing this month.

A person with knowledge of the situation remarked, "The sales conducted this week have fully repaid the banks that had provided leverage to amplify the fund's bets."

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Aschenbrenner may have avoided the total destruction that Bill Hwang's Archegos Capital Management experienced in 2021. In that case, banks issued margin calls that forced a cascade of liquidations. Aschenbrenner, by contrast, could emerge from this week with a portfolio that remains larger than most hedge funds, supported by significant holdings in private companies that he has retained.

Why This Is Not Another Archegos

It is tempting to draw parallels with Bill Hwang's Archegos Capital Management, which collapsed in 2021. But Aschenbrenner may avoid that level of complete failure.

The main reason is the private investment in Anthropic PBC. That AI company, Anthropic PBC, is still held by the fund and carries a valuation of about $5 billion. That single asset keeps the fund's total size above that of most hedge funds.

No institution is stuck with bad debt, unlike the mess Archegos left behind.

Aschenbrenner is known throughout Silicon Valley for his work as an AI researcher, having warned about the dangers of the technology race and the speed of change, as outlined in a 2024 note he called "Situational Awareness." He started the investment firm that same year, and by the end of last year it had roughly eight employees, per a regulatory filing.

Situational Awareness has invested in companies linked to the AI boom, such as Bloom Energy Corp., semiconductor company Sandisk Corp., and CoreWeave Inc., a cloud provider. Additionally, the fund co-led a financing round for MatX, an artificial intelligence chip startup founded by two former members of Google's semiconductor unit.

The fund also owned shares of Nebius Group NV, an AI-oriented cloud platform, which has dropped sharply from its June high. Situational Awareness further expanded its AI exposure via Asia-based firms such as SK Hynix Inc., which listed on a U.S. exchange earlier this month. However, its American depositary receipts have declined since then and continue to trade below the $149 listing price.

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