Hedge Fund Situational Awareness Seeks Capital After AI Stock Rout

Situational Awareness, the 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 Financial Times reported that the fund approached investors and lenders for funding, citing people briefed on the discussions and a July 24 investor letter.

The hedge fund had gained 439% after fees through June, according to the letter, but its borrowing increased the size of its bets, driving up losses when AI stocks collapsed during July's market rout. Aschenbrenner argued in the letter that the sell-off created attractive investment opportunities.

Situational Awareness has a significant stake in Bitcoin miner stocks, with about $1.11 billion in positions across seven companies, including IREN, Core Scientific, Riot Platforms, and CleanSpark, as reported by Cointelegraph in March. The fund had made a big bet on the power and data centers supporting AI, including BTC miners pivoting into AI computing.