JPMorgan Cuts Ties with AI Hedge Fund After Massive Losses

JPMorgan Chase has ended its lending activities to Situational Awareness, an AI-focused hedge fund that experienced significant losses due to its leveraged positions in chip stocks.

The fund, managed by Leopold Aschenbrenner, a former OpenAI researcher, was forced to liquidate most of its public equity holdings after a global selloff in chip stocks triggered a margin call in July. The hedge fund's portfolio value dropped 67% that month alone.

JPMorgan formally informed Situational Awareness that it would end their lending relationship following the downturn, although other Wall Street banks continue to act as brokers for the fund. Clear Street, a New York-based brokerage firm, has also started working with Situational Awareness.