'Very expensive scars': Leopold Aschenbrenner takes full responsibility in letter to investors after 67% July loss

Leopold Aschenbrenner, the founder of AI-focused hedge fund Situational Awareness, has admitted that his firm "let investors down" after suffering a 67% loss in July, saying he takes "full responsibility" for a month that brought the fund close to what he described as "permanent capital impairment." He said the experience had left the firm with "very expensive scars" that would become "invaluable lessons" for the organisation. The hedge fund, launched in early 2025 with less than $1 billion, had reportedly grown to around $45 billion by the beginning of July. Aschenbrenner, a former OpenAI researcher with no prior experience managing money, had borrowed heavily to amplify bets on companies including SanDisk, SK Hynix and CoreWeave. He also described a feedback loop in which stocks publicly associated with the fund faced increasing selling pressure. As those dynamics intensified, he said, the situation became "essentially similar to a bank run," where growing vulnerability fed further weakness. "We embrace volatility. But it should never jeopardize the fund," he wrote. "I take full responsibility for these events," Aschenbrenner wrote in the letter cited by Business Insider. "My core promise to you is that we will not waste the opportunity to learn from these events," he wrote, adding that his goal is to emerge as "a wiser and stronger investor."