AI investment and software stock short positions both lost, and hedge fund Situational Awareness cleared all listed stocks and sought new financing

The Zhitong Finance App learned that according to people familiar with the matter, Situational Awareness, a hedge fund founded and managed about 24 billion US dollars by former OpenAI researcher Leopold Aschenbrenner, has cleared all of its listed stock holdings after suffering huge losses in artificial intelligence (AI) related investments, and is seeking new financial support.

According to reports, the fund has sold its entire portfolio of listed stocks to another large hedge fund in a single transaction. In addition, Situational Awareness also sold a large stake in the artificial intelligence startup Anthropic, but the identity of the buyer has not been disclosed.

People familiar with the matter said that the fund's performance has been hit hard by the recent sharp pullback in the AI sector. AI infrastructure-related assets, which have a heavy layout, continued to decline, while software stock short positions also lost money, causing the fund to suffer a double blow. Among them, AI hardware-related investments such as SKHY.US (SKHY.US) are under pressure, and short positions in software stocks such as Adobe (ADBE.US) also dragged down overall performance.

The media quoted people familiar with the matter as reporting that Situational Awareness is currently discussing financing matters with existing investors and lenders, hoping to raise new capital. At the same time, the fund also provides some investors with the opportunity to sell some assets in their portfolios to enhance liquidity.

In addition, the fund is also promoting shares in a number of unlisted companies, including Anthropic, to potential buyers, but the size of Anthropic shares to be sold this time has not been disclosed.

People familiar with the matter revealed that a number of major brokers, including Bank of America, Goldman Sachs, and J.P. Morgan Chase, have been helping the fund meet margin requirements and reduce its positions in an orderly manner. These institutions initially promoted the fund's long and short portfolio assets to the market, which eventually led to the sale of all of its listed stock portfolios as a whole.

Although it has withdrawn from investing in all listed stocks, Situational Awareness has not ceased operations and currently holds portfolios of unlisted companies.

Notably, previously Situational Awareness was one of the best performing hedge funds this year. According to a July 24 letter to investors checked by the media, as of the end of June this year, the fund's net return was as high as 439%.

However, Aschenbrenner also acknowledged in the letter that the fund “has not been immune to recent market fluctuations”, particularly the impact of Asian market adjustments on the investment portfolio. However, he also said that this round of correction has created the most attractive investment opportunity since the beginning of 2025, and believes that Anthropic's future IPOs are expected to become an important catalyst for the AI sector, and investors are invited to continue adding capital on August 1.

A number of people familiar with the matter said that Situational Awareness previously used extensive leverage to amplify AI investment bets. This strategy significantly increased fund returns during the AI market's upward phase, but during the recent rapid correction in the AI sector, it also simultaneously amplified losses.

According to regulatory documents, as of the end of the first quarter of this year, the main holdings disclosed by Situational Awareness included NEBIUS (NBIS.US), SanDisk (SNDK.US), Micron Technology (MU.US), and CoreWeave (CRWV.US). The cumulative decline of these stocks this month has exceeded 35%. Earlier position documents also showed that the fund had held Oracle (ORCL.US) and AMD (AMD.US), and the stock prices of the two companies also declined markedly due to recent AI sector adjustments.

After leaving OpenAI in 2024, AschenBrenner founded Situational Awareness and built a fund around its core investment logic, that is, the rapid development of artificial intelligence will continue to drive a significant increase in demand for chips, storage, data centers, and power infrastructure. However, with the recent collective pullback in AI-related assets, this highly concentrated investment strategy is facing a severe test.