Situational Awareness Sells Public Assets to Citadel After Meltdown

The AI-focused hedge fund Situational Awareness, founded by former OpenAI researcher Leopold Aschenbrenner, liquidated its public equity portfolio to Citadel on July 30, 2026. The firm was forced to sell these assets at a steep discount after major holdings, including Micron, Sandisk, Nebius Group, and CoreWeave, dropped more than 35% in July. This decline triggered margin calls from prime brokers, including Goldman Sachs and JPMorgan Chase, as hedge fund leverage reached record levels throughout 2026.

Despite the collapse, the fund had seen explosive growth, scaling from under $1 billion to an estimated $20 billion to $24 billion after returning 439% in the first half of the year. While Kenneth Griffin's Citadel acquired the liquid public assets, Situational Awareness retained several private investments, including an early stake in Anthropic.

The event has drawn significant social media attention, contrasting the fund's failure with Aschenbrenner's background as a Columbia University valedictorian and his previous reputation as an AI savant. Aschenbrenner had previously been fired from OpenAI in 2024 for allegedly sharing internal information.