Situational Awareness, a $24 billion hedge fund established by former OpenAI researcher Leopold Aschenbrenner, has divested its entire public equities portfolio following substantial losses from its AI-related trades. The fund experienced declines from holdings in AI infrastructure companies like SK Hynix and unfavorable movements from short positions in software firms such as Adobe. Public equities, including both long and short positions, constituted approximately two-thirds of the fund's investments.
Major banks including Bank of America, Goldman Sachs, and JPMorgan were involved in assisting the fund with margin calls and position reductions. The fund’s entire public book has reportedly been sold to a single, larger hedge fund, with Citadel mentioned as the buyer in a related article about Ken Griffin. Despite the liquidation of its public holdings, Situational Awareness continues to operate with private investments and is exploring the sale of some of these, including a stake in Anthropic.
This event highlights the volatile nature of AI-driven investments, contrasting with Citadel's recent strategic moves. Billionaire Ken Griffin's Citadel, which is recognized as a highly profitable hedge fund, has been actively increasing its exposure to AI stocks, acquiring shares in companies like Palantir Technologies and Robinhood Markets, despite some analyst concerns about high valuations.
