Funded by Stripe Brothers, High-Flying Hedge Fund Crashes in Fire Sale

Situational Awareness LP, a hedge fund focused on AI investing, has sold its entire public stock portfolio in a fire sale due to margin pressure. The fund, run by Leopold Aschenbrenner, a former OpenAI researcher, had reportedly used leverage as high as 4x and suffered significant losses.

The fund's strategy centered around AI infrastructure and data-center proxies, with holdings including Riot Platforms, CleanSpark, and Bloom Energy. These companies are involved in Bitcoin mining and energy production for data centers, which are expected to be in high demand due to the growing power requirements of AI systems.

Aschenbrenner's fund had seen significant gains, with a 439% net gain since inception and year-to-date returns north of 147%. However, the use of high leverage proved disastrous when the market turned against them. The entire public portfolio was sold to a single buyer on or around July 30.

The sale has raised concerns among investors holding AI infrastructure stocks and Bitcoin mining equities. Aschenbrenner is reportedly continuing to seek new capital and market its private positions, including a stake in Anthropic valued at near $60 billion.