Leopold Aschenbrenner is not your typical hedge fund manager. A Columbia University valedictorian by the age of 19, he later worked at OpenAI. He was terminated from OpenAI in 2024 after the firm said he improperly disclosed internal details. Later that same year, he started his own hedge fund, Situational Awareness, with $24 billion.
Now that fund is in trouble.
As of the close of the first quarter, the fund's top positions were Nebius Group, SanDisk, Micron, and CoreWeave - each of which has tumbled more than 35% this month. That is a steep hit for any portfolio, and it got bad enough that the fund is now unwinding many of its trades and may be forced to sell assets.
To manage the margin calls, the fund's main lenders - JPMorgan Chase, Bank of America, and Goldman Sachs - have begun intervening to reduce the portfolio's risk. When a fund can't cover losses, those banks work to ensure everyone gets paid, often by marketing holdings for sale.
Get the market news that matters in a five-minute read with Market Briefs, our free daily newsletter
Aschenbrenner bet big on the AI boom, especially on infrastructure stocks that supply hardware and memory chips. SK Hynix, a key AI memory chip maker, was a holding that declined. So did the four top holdings listed above.
But the fund did not just own stocks it liked. It also shorted some software companies, betting their prices would fall. One of those shorts was Adobe.
That bet blew up. Adobe's stock rose instead, which means the fund had to buy it back at a higher price to close the trade - adding to the losses.
When a fund loses this much this fast, it needs cash. Banks start asking for more collateral, known as margin calls. To meet those calls, the fund started selling what it can.
That includes stakes in private companies. Situational Awareness owned a piece of Anthropic, the AI company behind Claude, and is now marketing that stake to raise liquidity.
It was not immediately clear how much the fund had lost or how much cash it was trying to obtain.
If the unwinding turns into a forced liquidation - where the fund has to dump everything it holds - those AI stocks could take another hit. The same names that rode the AI wave up could feel downward pressure as a $24 billion fund sells into the market.
Join Market Briefs, our free daily newsletter, for a quick daily rundown of the markets
