Citadel, led by Ken Griffin, has purchased the bulk of the stock portfolio belonging to Situational Awareness, an AI-focused hedge fund managed by former OpenAI researcher Leopold Aschenbrenner. This acquisition comes after Situational Awareness experienced substantial losses in its technology holdings due to a broad market sell-off in AI stocks during July. The move underscores Citadel's capacity to step in as a liquidity provider during periods of market stress, especially for leveraged funds facing margin calls.
Situational Awareness, which at its peak managed around $20 billion in assets, had seen an impressive 439% return from the start of 2024 to the end of June 2026. However, reports indicate the fund lost approximately two-thirds of its value in July. The fund's public portfolio was heavily invested in prominent AI names like Broadcom, Intel, and CoreWeave, and its leverage exacerbated the impact of the downturn. Financial institutions such as Bank of America, Goldman Sachs, JPMorgan Chase, and Citigroup were involved in facilitating the deal.
Despite the sale, Situational Awareness is expected to retain a portfolio valued at roughly $10 billion, including remaining public equities and private investments. Notably, the fund's approximately $5 billion stake in AI company Anthropic was not part of the transaction. The hedge fund, despite its earlier success attracting backers like Jane Street and founders from Stripe and Meta Platforms, was under pressure to either raise new capital or offload its entire book, ultimately opting for the latter for its public equity holdings.
