AI Fund Faces 67% Loss and Liquidation of Leverage

Situational Awareness recorded a 67% loss in portfolio value due to a correction in AI-related stocks in July. The concentrated investment in overvalued AI infrastructure stocks and leverage contributed to the losses. Founder Aschenbrenner stated in a letter to investors that "we have come closer to a level of permanent capital impairment than we can accept." This fund, established in 2024, is a hedge fund focused on AI, investing in semiconductor and AI infrastructure companies. The direct background of the losses is the correction in semiconductor and AI infrastructure-related stocks. According to CryptoBriefing, the fund's assets under management shrank from approximately $45 billion in early July 2026 to about $10 billion following a sharp decline in semiconductor stocks. While increasing market exposure through leverage, the fund was forced to sell off assets due to additional margin calls. Situational Awareness has liquidated most of its public portfolio following the losses in AI stocks, and Aschenbrenner has stated that all leverage has been removed. The fund sold a significant portion to Citadel, which has reduced over 80% of the acquired positions. Citadel completed transactions exceeding $4 billion through approximately 100 block deals. As of June 30, Situational Awareness reported $5.6737378513 billion in SanDisk and $5.573819392 billion in Micron. The SEC is monitoring this fund and is focusing on investigations related to market movements.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.