Citadel acquires Situational Awareness stocks after 67% July drop
Ken Griffin’s Citadel acquired the discounted public equity portfolio of Leopold Aschenbrenner’s heavily leveraged hedge fund, underscoring the rapid liquidity risks in concentrated AI trades during market downturns.
Citadel bought a large proportion of the public stock portfolio of Situational Awareness at a discount. The transaction followed the hedge fund’s brutal 67% drop in July amid a broad sell-off in artificial intelligence equities. Despite the monthly collapse, the fund remains up roughly 80% for the year after surging 439% through June.
The sale provided necessary liquidity after Situational Awareness faced pressure to meet margin calls from lenders. In a separate, ultimately aborted transaction, the fund agreed late Wednesday to sell $3.5 billion of its Anthropic shares to a group led by Greenoaks and Sequoia Capital, only to withdraw from the deal the following morning. It could not be confirmed whether formal margin calls had been issued prior to the Citadel sale.
The fund’s leveraged positions suffered heavily as specific AI-linked equities plummeted. Sandisk fell 44% in July, Bloom Energy dropped 32%, and CoreWeave lost 26%. Situational Awareness held direct shares in all three companies as of March 31, according to regulatory filings.
It remains unclear whether Citadel’s purchase included the fund’s sizable cryptocurrency mining positions. As of late March, Situational Awareness held $1.11 billion in shares across seven Bitcoin mining companies, including Core Scientific, Riot Platforms, and CleanSpark. These positions represented a bet on miners repurposing their power infrastructure and data centers for high-performance computing and AI.
The rapid reversal highlights the fragility of leveraged, thematic hedge fund strategies when market sentiment shifts. Situational Awareness was founded by Leopold Aschenbrenner, a former OpenAI researcher who argued in a 2024 essay that artificial general intelligence would arrive by 2027, driving massive demand for power and computing. Prior to his time at OpenAI, Aschenbrenner was part of the five-person team at the FTX Future Fund, resigning as the exchange collapsed in November 2022.
Following the fire sale to Citadel, Situational Awareness retains roughly $10 billion in assets. This remaining portfolio includes its Anthropic stake alongside other private investments and equities. Neither Citadel nor Situational Awareness responded to requests for comment.
