Leopold Aschenbrenner's hedge fund, Situational Awareness, invested $400 million in a stealth chip startup named Source Foundry. This investment, which closed on Tuesday, August 5, 2026, followed an earlier $100 million stake in the same company the previous month. The news comes after Situational Awareness, once valued at $45 billion in assets, recently faced a near-collapse due to a rapid decline in its highly-leveraged public technology holdings, specifically in AI infrastructure names like SK Hynix and CoreWeave, and bearish bets on software companies. The fund's assets had shrunk to about $10 billion.
This $400 million investment marks the first major move by Aschenbrenner since the fund's turmoil. It was described as a key indication of his rebuilding strategy. Last week, Situational Awareness was forced to sell a significant portion of its public stock portfolio to Ken Griffin's Citadel to meet margin calls from lenders, having used as much as 400% leverage. The fund's top disclosed positions, including Nebius Group, Sandisk, Micron, and CoreWeave, had each lost over 35% of their value during the downturn.
Source Foundry is a company involved in the manufacturing of chips. The investment highlights Aschenbrenner's continued focus on the AI sector, even after the significant losses. In a letter to investors, Aschenbrenner stated his commitment to learning from the experience and ensuring the fund's survival, with the bulk of his own capital remaining invested alongside his backers'. Notable investors in Situational Awareness include Neil Mehta, Gaurav Kapadia, Feroz Dewan, and Dan Sundheim, as well as early backers like Patrick and John Collison, Daniel Gross, and Nat Friedman.
