Leopold Aschenbrenner's Situational Awareness lost 67% in July, took margin calls it could not meet, and sold its entire public stock portfolio to Citadel at a discount before Thursday's opening bell. Assets fell from roughly $45 billion to about $10 billion.
Every headline calls this a collapse. One number complicates that.
The fund is up about 80% for the year
Through June it was up 439%.
A 67% monthly loss on top of a 439% gain still leaves you well ahead. The fund was not liquidated. It has not shut down. It kept its private positions, including its stake in Anthropic. Investors who were in from the start are, on paper, up substantially.
What actually died was the leverage. Aschenbrenner was borrowing roughly three to four dollars for every dollar of capital, and he has now told investors that the fund will stop borrowing from banks to amplify public-market bets altogether.
That distinction matters because "$45 billion fund collapses" and "leveraged fund gets margin-called out of its public book and keeps trading" are different events. This is the second one.
How both sides broke at once
The construction was elegant and, in July, catastrophic.
Long the physical layer of AI: memory chips and data centres — CoreWeave, SK Hynix, Nebius, SanDisk. Short the software companies he expected AI to disrupt, Adobe among them.
In July the infrastructure names fell and the software names rallied. A long/short book is supposed to protect you because the two sides move in opposition. Here they moved against him simultaneously, which is the specific failure mode that makes leverage lethal rather than merely expensive.
At three-to-four-times gearing, a move that would have been a bad month became a margin call.
The night before
Bloomberg's account of Wednesday is the part worth reading twice.
Aschenbrenner approached Sequoia and Greenoaks about buying private stakes — including a $3.5 billion slice of his Anthropic holding — to raise cash. That deal fell apart.
Patrick and John Collison, the Stripe founders who helped seed the fund, spent hours at his offices while he negotiated with Citadel and Millennium past midnight. Citadel won, and bought the public book at a discount.
By Thursday morning the shorts and the leverage were gone.
"We let you down this month"
The letter is unusually plain for the genre. Aschenbrenner took full responsibility, compared the dynamic to a bank run, and set out what changes.
Two details around it are less flattering. The fund had asked investors for additional capital days earlier. And he offered investors one-on-one phone calls for the following week — the week he was due to be on honeymoon.
The wedding
He wrote it as guests were arriving in Carmel, California.
Aschenbrenner married Avital Balwit, chief of staff to Anthropic chief executive Dario Amodei. The two met years ago while working at the FTX Future Fund, the philanthropic arm of Sam Bankman-Fried's exchange — a detail no novelist would risk.
Per Fortune, the weekend opened with a colloquium of panels and breakout sessions, followed by a ceremony at a Tuscan-style villa and a departure for a forest spa retreat. A wedding with a conference programme is its own small ethnography of this world.
For the record: nobody has alleged any impropriety involving the fund's Anthropic position or his marriage, and the stake predates the wedding.
Who he is
Aschenbrenner was a researcher on OpenAI's superalignment team until he was dismissed in 2024. That year he published "Situational Awareness: The Decade Ahead," an essay arguing that artificial general intelligence was closer and more consequential than markets understood — and then launched a fund to trade the thesis.
He was called the Nostradamus of AI on the way up. The essay was right enough about the direction that the fund made 439% in six months. July is what happens when you are right about a direction and wrong about a month, with borrowed money.
What to watch
Whether investors redeem from the remaining $10 billion, what the Anthropic stake gets marked at, and whether an unleveraged Situational Awareness can produce anything like the returns that made it famous.
