The Bet on the AI Boom Backfired: Fund of Former OpenAI Researcher Sells Most of Its Holdings

Leopold Aschenbrenner's hedge fund, founded by a former OpenAI researcher, is closing most of its positions after heavy losses in AI stocks and a failed bet against software stocks. Ken Griffin's Citadel has signed an agreement to acquire its traded assets. The fund, which grew to about $45 billion in early July, lost more than 35% of the value of its major holdings this month, including Nebius, Sandisk, Micron, and CoreWeave.

Situational Awareness, the hedge fund founded by Leopold Aschenbrenner, a former senior researcher at OpenAI, is closing most of its positions after heavy losses in AI company stocks and a failed bet against software stocks. According to a CNBC report, Ken Griffin's Citadel has signed an agreement to buy the fund's traded assets. The fund suffered significant losses in recent weeks due to its investments in AI infrastructure companies, such as chip maker SK Hynix, while short positions on software companies like Adobe underperformed. One insider noted that in early July, before the losses materialized, the fund had grown to about $45 billion. The situation is still dynamic, and it is unclear whether the fund meets margin requirements. The fund negotiated to sell its stake in Anthropic, but it is unclear if the deal was completed. A company spokesperson said reports of reduced holdings are inaccurate. The asset sale comes at a problematic time for Aschenbrenner, who is getting married this weekend. Aschenbrenner, 25, became a talked-about figure in AI trading due to the view that powerful AI systems will require massive expansion in chips, memory, data centers, and power supply. As of the end of the first quarter, major holdings included Nebius Group, Sandisk, Micron, and CoreWeave, whose shares fell more than 35% this month. Aschenbrenner was fired from OpenAI in 2024 over alleged improper disclosure of internal information, and he denies the accusation.