Hedge Fund Seeks Capital After AI Stock Sell-Off Wipeout

Situational Awareness, a hedge fund founded by ex-OpenAI researcher Leopold Aschenbrenner in 2024, is seeking fresh capital after suffering heavy losses during the recent AI stock sell-off.

The fund had around $20 billion in assets under management as of June 8 and had gained 439% after fees through that date, according to an investor letter. However, borrowing increased the size of the fund's bets, leading to significant losses when AI stocks collapsed during July's market rout.

Aschenbrenner argued in the letter that the sell-off created attractive investment opportunities and had made a big bet on power and data centers supporting AI, including Bitcoin miners pivoting into AI computing. The fund held around $1.11 billion in positions across seven Bitcoin miner stocks, including IREN, Core Scientific, Riot Platforms, and CleanSpark.