JPMorgan Cuts Ties with AI Hedge Fund After $35 Billion Loss
JPMorgan Chase has cut off lending to Situational Awareness, an AI-focused hedge fund founded by Leopold Aschenbrenner, following heavy losses during a sharp sell-off in technology stocks.
The bank had provided financing through its prime brokerage business, allowing the fund to use leverage for its investments. However, after the fund suffered an approximate 67% decline in assets during July, JPMorgan ended the lending relationship.
Situational Awareness had previously built substantial positions in major semiconductor and AI-related companies, but following a sharp global decline in chip stocks, it transferred the bulk of its public equity holdings to Citadel. The fund's assets dropped to around $10 billion from a peak close to $45 billion after the July selloffs.