Hedge Fund Situational Awareness Bets on AI Stocks Reverse, Assets Shrink from $45 Billion to $10 Billion
Leopold Aschenbrenner's Situational Awareness fund, which heavily invested in AI-related stocks, suffered a severe reversal as holdings like Sandisk and Micron Technology plunged in July. The fund's peak assets of roughly $45 billion collapsed to about $10 billion, forcing a distressed sale of its public stock portfolio to Citadel.
According to the latest regulatory filing, Leopold Aschenbrenner's Situational Awareness fund held a heavy weighting in several artificial intelligence-related stocks as of the end of June 2026, but those positions became the main victims of a market rout in July. The fund's 13F filing, released on August 13, showed its top five U. S. stock holdings as of June 30 were Sandisk, Micron Technology, Bloom Energy, Taiwan Semiconductor Manufacturing, and Nebius Group. All five stocks suffered steep losses in the subsequent month, as the AI trade sharply reversed, pushing the fund to the brink of bankruptcy and forcing it to sell most of its public stock portfolio to Citadel.
Sandisk, the fund's largest U. stock holding with a market value of $5.7 billion, plunged nearly 47% in July. The Micron Technology position of about $5.6 billion fell close to 29%, Bloom Energy dropped 32%, Taiwan Semiconductor Manufacturing declined 15%, and Nebius Group fell 31%.
Situational Awareness had built its strategy around Wall Street's hottest AI infrastructure trade, investing in companies that provide storage chips, data centers, and power for AI development, while shorting software firms Aschenbrenner believed were vulnerable to AI disruption. The strategy had been highly successful, with returns exceeding 1,000% since inception before the July downturn, and assets peaking at roughly $45 billion, according to a June report. However, the sharp reversal of multiple key bets, combined with losses in other parts of the portfolio and the use of leverage, quickly triggered a liquidity crisis.
By July 30, the fund was forced to sell leveraged stock positions, including SK Hynix and CoreWeave, at a discount to Ken Griffin's Citadel, with assets shrinking to about $10 billion. The 13F filing only covers long U. stock positions as of June 30 and does not fully reflect the fund's risk exposure or the trades that ultimately led to the losses.