Leopold Aschenbrenner’s Situational Awareness fund suffered a 67% drawdown in a single month, with assets under management plummeting from $45 billion to roughly $10 billion. The blowup resulted from heavily concentrated long positions in AI hardware and semiconductor stocks such as SK Hynix, Nebius and Micron, while short positions in companies like Adobe provided insufficient downside protection. To meet liquidity requirements, the fund was forced to liquidate approximately $16 billion in public equity holdings to Citadel at a 10% discount, with the process completed by July 30. Despite the July catastrophe, the fund still reported roughly 80% year-to-date gains, supported by private holdings, most notably a stake in Anthropic. The forced liquidation of such a large fund at fire-sale prices is expected to impact cryptocurrency mining companies that had pivoted toward AI computing solutions.
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