Situational Awareness, an AI-focused hedge fund founded by former OpenAI researcher Leopold Aschenbrenner, has sold its entire public equities portfolio to Ken Griffin's Citadel, a source told Axios. The Wall Street Journal was the first to report the sale.
Why it matters
The sale comes amid a recent sell-off in AI-related stocks, particularly among chipmakers. That downturn has inflicted heavy losses on investments tied to AI hardware and related sectors, influencing hedge funds' portfolio decisions.
Background
Leopold Aschenbrenner left OpenAI in 2024; his departure followed an alleged information leak that he disputes. After leaving, he founded Situational Awareness. The fund recently reported roughly $20 billion in assets under management.
Early backers of the firm included Stripe cofounders Patrick and John Collison, former GitHub CEO Nat Friedman, and former Apple employee Daniel Gross.
Recent developments
The Financial Times reported yesterday that Situational Awareness sought to raise fresh capital from investors after suffering heavy losses during the recent rout in AI stocks. That fundraising effort and the deteriorating market appear to have accelerated the decision to divest the fund's public equity holdings.
Implications
Reports so far do not provide specific transaction figures or the exact value of the sold positions. Nonetheless, the move indicates the fund is reshaping its risk exposure amid heightened volatility in the AI sector.
