AI hedge fund Situational Awareness sells public portfolio but retains Anthropic stake

Situational Awareness, a hedge fund founded by former OpenAI researcher Leopold Aschenbrenner, sold the majority of its public stock portfolio to Citadel following steep losses over the past month, according to a report by The Wall Street Journal. The fund’s leveraged positions in AI infrastructure equities—including memory chip producers SK Hynix and Sandisk, clean energy developer Bloom Energy, and neocloud provider Nebius Group—declined sharply as public investors grew concerned that capital expenditures were not translating into near-term revenue. Some of these holdings fell more than 30% in a month.

The fund’s assets under management reportedly peaked near $45 billion before the selloff, but dropped to roughly $10 billion after Citadel’s purchase of the bulk of its public holdings, Bloomberg reported. Situational Awareness had raised several hundred million dollars at its outset, with early backers including quant-trading firm Jane Street, Stripe co-founders Patrick and John Collison, and Meta executives Daniel Gross and Nat Friedman.

Despite the public unwind, Situational Awareness retained its private company holdings, most notably a stake in Anthropic valued at $5 billion, according to Bloomberg. Anthropic was last valued at $965 billion in a May Series H round and is expected to go public as soon as October, potentially at a higher valuation. Other private investments in the fund’s portfolio include chipmaker MatX and AI data center startup Fluidstack, which was reportedly in talks in April to raise a new round at an $18 billion valuation.

Aschenbrenner, who joined OpenAI’s “superalignment” team in 2023 and was dismissed a year later over an improper disclosure of internal information, framed the selloff as a buying opportunity in a July 24 letter to investors. However, Bloomberg reported that the appeal for fresh capital starting August 1 did not garner the commitments he had hoped for. The episode underscores the risks of leveraged bets on AI infrastructure and the contrast between public market repricing and private valuations.