Hedge Fund Tied to AI Stocks Seeks New Funding After Substantial Losses

Hedge fund Situational Awareness is seeking new funding after taking substantial losses tied to the recent sell-off in artificial intelligence stocks. The firm, founded by former OpenAI researcher Leopold Aschenbrenner in 2024, has approached investors and lenders for additional capital.

The Financial Times reported that borrowing amplified the impact of the downturn on the fund's leveraged positions, which were centered around AI infrastructure. This includes data centers, power generation, and related infrastructure, as well as investments connected to Bitcoin miners pivoting into AI computing.

The fund has offered some investors the option to buy portfolio assets, an approach that can be used when a manager wants to reduce exposure or improve liquidity without immediately selling positions into a weak market. The scale of losses and the amount of capital being sought were not disclosed in the discussions reviewed by the FT.