The 24-Hour Race to Salvage Situational Awareness' Souring Bets

(Bloomberg) -- He was hailed as the "Nostradamus" of AI — a young oracle with bold prophecy for the future. "Before long, the world will wake up," Leopold Aschenbrenner, tech-seer-turned-hedge-fund-manager, predicted in 2024. This week, it did — but not in the way Aschenbrenner had foreseen. In a blink, his wildly successful hedge fund, Situational Awareness, was forced to sell billions of dollars of technology investments that had rapidly lost value, as nervous banks began to demand more and more collateral for his trades. Then came billionaire Ken Griffin. In less than 24 hours — which included a conversation between Griffin and Aschenbrenner — Griffin's Citadel hedge fund reached out to Situational Awareness and snapped up the investments at a discount, according to a person familiar with the matter who asked not to be identified citing private information. It was a startling reversal for Aschenbrenner, a former researcher at OpenAI who — before starting his hedge fund roughly two years ago — had no previous investment experience. His fledging firm has watched its assets plunge from $45 billion at the start of July to about $10 billion. The development puts Situational Awareness — named after a viral essay that Aschenbrenner posted in 2024 about the future of artificial intelligence — on a new and uncertain course, and hands Griffin, a seasoned finance veteran, stakes in major AI players. Still, as the dust settles on Aschenbrenner's chaotic week — it looks like the 20-something is still set to come out only bruised. He continues to run one of the biggest equity hedge funds in the world. And in just two days, he'll wed his fiancee — the chief of staff to the CEO at Anthropic PBC — at a venue in California's Carmel Valley. In recent months, banks including Goldman Sachs Group Inc., JPMorgan Chase & Co. and Bank of America Corp. were happy power his rise, with some firms offering to lend the fund four to five times its capital, according to people familiar with the matter. And then, as technology shares started to slide in the past few weeks, the lenders proved unwilling to ride it out. Aschenbrenner began liquidating positions to meet the barrage of margin calls. Along the way, he picked up a more than $5 billion stake in Anthropic, which he held onto amid the tumult of this week.