Ken Griffin's Citadel, a multi-strategy hedge fund with $71 billion in assets under management, has purchased a significant part of Situational Awareness's stock portfolio. Situational Awareness, led by Leopold Aschenbrenner, a former OpenAI employee, saw its $16 billion public equities portfolio lose 67% of its value in July due to a sell-off in AI stocks. The deal was facilitated within 24 hours with the involvement of prime brokers including Goldman Sachs, JPMorgan Chase, Bank of America, and Citigroup, making it one of Wall Street's largest rushed stock transactions.
Situational Awareness, which had grown to manage over $20 billion in assets within two years, used borrowed money to amplify its bets on AI-related companies such as SK Hynix, Sandisk, Bloom Energy, and Nebius Group. Citadel specifically acquired the portion of Situational's public portfolio that was financed with leverage from brokers. Situational still holds its private investments, including a $5 billion stake in AI giant Anthropic, and is expected to retain a book of roughly $10 billion after the deal.
The acquisition underscores Citadel's reputation as a "rescue buyer" during market downturns and its ability to take on significant risk. Leopold Aschenbrenner had attributed some losses to short sellers targeting the firm's positions. Shares of companies in Situational's portfolio reportedly rose after the news of the sale to Citadel emerged.
