Citadel has acquired the bulk of Situational Awareness's stock portfolio after the AI-focused hedge fund run by former OpenAI researcher Leopold Aschenbrenner faced heavy losses, according to sources familiar with the deal. Ken Griffin's firm, which manages about $71 billion in assets, is picking up the portion of the public portfolio that was financed by leverage from brokers.
Citadel's assets under management
Situational Awareness, launched in 2024, was forced to unwind most of its public equities portfolio under pressure to either raise fresh capital or offload the book, and chose the latter, sources said. The fund's public holdings included stocks in Broadcom, Intel, and CoreWeave, according to its most recent regulatory filings. After the deal, Situational will retain a book of roughly $10 billion in stocks and private investments, including Anthropic, which it has not sold.
The transaction was facilitated by top Wall Street prime brokers including Goldman Sachs, JPMorgan Chase, Bank of America, and Citigroup, according to sources. The Wall Street Journal reported the deal on Thursday.
The deal follows a broader downturn in AI stocks that has hit hedge funds globally. Global hedge funds are experiencing their biggest monthly drawdown on record, and Asia-focused fundamental long-short funds are down 18.6% on average through July 28, according to a Goldman Sachs note. Stock-picking funds have been unwinding AI positions, covering shorts and selling longs in roughly equal amounts, per a Morgan Stanley note.
Aschenbrenner's fund, which previously managed about $20 billion in assets and employs around 20 people, had achieved a 439% return from the start of 2025 to the end of June. It attracted investors including Jane Street, Stripe co-founders Patrick and John Collison, and Meta executives Daniel Gross and Nat Friedman. The fund had used leverage to boost positions, similar to peers, and it is not clear whether it faced margin calls before the deal.