JPMorgan Axes Lending to Situational Awareness Amid AI Bet Loses

JPMorgan Chase has cut off lending to Situational Awareness, a hedge fund led by former OpenAI researcher Leopold Aschenbrenner. The decision comes after the fund's AI bets led to significant losses in July, causing its portfolio value to drop 67%.

The global chip-stock rout exposed the fund's leveraged bets to steep losses, triggering a margin call. Situational Awareness was forced to liquidate most of its public equity holdings, selling them to Citadel.

JPMorgan notified Situational that it would end its lending relationship after the losses. However, other Wall Street banks, including Goldman Sachs and Citigroup, remain active brokers for the company.