Goldman Sachs has reportedly reaped more than $200 million in fees this year from the hedge fund Situational Awareness, an AI-focused investment firm founded by former OpenAI researcher Leopold Aschenbrenner. This figure represents revenue booked from serving this hedge fund across various services, including prime brokerage, financing, capital introduction, and advisory-adjacent flow. This fee income is attributed to both the rapid growth of Aschenbrenner's fund and the types of trades it conducted.
Situational Awareness, launched in 2024 with several hundred million dollars in assets, grew to over $20 billion at its peak, delivering a 400% return. It became Goldman Sachs' largest client in its prime brokerage division and one of its largest clients in the overall trading division. The firm, barely two years old, achieved this status remarkably quickly on Wall Street, putting it alongside established hedge funds like Citadel and Millennium.
Goldman was a primary lender to Situational Awareness, but the fund experienced significant losses in July due to a sharp sell-off in AI company stocks, dubbed the “Soft Apocalypse,” exacerbated by its leveraged positions. As a result, Aschenbrenner sold most of his public holdings, valued at approximately $16 billion, to Ken Griffin’s hedge fund Citadel. JPMorgan also financed the fund but ceased lending after these losses.
Following these losses, Aschenbrenner informed investors that the fund would no longer use borrowed money to increase positions. This decision is expected to significantly reduce Goldman's future fees from Situational Awareness. The fee amount, over $200 million, was higher than any other Goldman client in the prime brokerage division for the year.
