Unless you're lucky enough to be living under a wifi-free log, you're likely aware that a highly leveraged AI-centric hedge fund named Situational Awareness went boom in the last 48 hours and was forced to sell off a large chunk of its assets to Citadel.
Here is a quick summary:
Leopold Aschenbrenner’s Situational Awareness went from wunderkind to forced seller in a matter of weeks. After reportedly gaining 439% in the first half of 2026 and growing to more than $20 billion, the fund was hit by the AI-stock rout, margin calls, and the brutal symmetry of leverage (the unwind of which I have been writing about).
SA first, apparently, sought fresh capital, but then sold most or all of its public-equity portfolio to Citadel in what looks like a distressed liquidation. The fund retains private investments, including Anthropic, so Aschenbrenner is not finished. His first public-markets cycle ended exactly as concentrated, leveraged single-factor trades usually do: spectacularly, twice. (Some sources: Wall Street Journal, Axios.)
I'll add a few more personal and chronological Aschenbrenner-ian notes, because it shows how I think about such things, and where curiosity can get you, or not.
I first encountered Aschenbrenner through his Situational Awareness essay in 2024, which seemed stereotypically effective altruist/cornucopian, so I paid it little heed. Blah blah abundance blah blah yo, more abundance blah blah AGI. Got it. But the essay was widely shared, and was clearly tremendous brand marketing for him and his views.
I next ran into him after speed-viewing his strangely sweatered appearance on the widely watched but interminable and fussy Dwarkesh podcast. I sometimes describe that show as what you'd get if you gave a compsci grad student a platform, no time limits, and marginally better grooming.
It was a kind of launch for the essay, so he mostly said the same things, largely to huzzahs from the host. Again, scary things that turned out—helpfully!—to be highly investable, if one were so lucky as to have direct connections to people at frontier model companies, large asset managers, clothiers, and so on.
I was still left puzzled, but, to a large degree, stopped thinking about him, other than using it as an example of the Valley marinating in its Valleyness.
But then he reappeared with a hedge fund, also called Situational Awareness. And it posted boffo numbers, as I described above, and claimed billions in assets. This made little sense to me, but it claimed Jane Street, the Collison brothers (obDisc: who I know) as investors, so it wasn't smoke and nonsense.
Again, however, those performance and AUM numbers. I kept trying to understand how it could work, and kept failing. I even had running conversations with various hedge fund manager friends over text about it, like the following, from April. I'm on the blue-bubbled right, obviously.
