Ken Griffin's Citadel Acquires Major Portion of Situational Awareness Holdings Following AI Market Downturn
Following the sale of leveraged publicly-traded stock positions to Ken Griffin's Citadel, Situational Awareness maintained approximately $10 billion in holdings, including its investment in Anthropic.
Situational Awareness, the hedge fund established by Leopold Aschenbrenner, a former researcher at OpenAI, has reportedly sold a significant portion of its publicly-traded stock holdings to Citadel, owned by Ken Griffin.
According to initial reporting by the Financial Times on Thursday, Citadel acquired the discounted holdings following substantial losses experienced during the artificial intelligence stock market downturn in July.
The deal came after Aschenbrenner's hedge fund experienced losses of approximately 67% during the month of July, as reported by The Wall Street Journal, which cited an individual who reviewed a communication sent to investors. According to the communication, the fund continued to show gains of roughly 80% for the current year. Earlier reporting from the Financial Times indicated the fund had achieved returns of 439% through the end of June.
According to these reports, Situational had reached out to current investors and lending institutions seeking additional capital and presented certain investors with opportunities to purchase assets from the portfolio. The Journal additionally reported that Situational required liquidity to satisfy margin calls from its lending institutions and that the fund had come to an agreement late on Wednesday to divest $3.5 billion worth of Anthropic holdings to a consortium spearheaded by Greenoaks and Sequoia Capital, only to back out of the transaction on Thursday morning.
In separate reporting, Reuters confirmed the detail regarding the leveraged portfolio but indicated it was unable to verify whether official margin calls had been made prior to the transaction. According to Reuters, Situational maintained approximately $10 billion in equities and private holdings, which includes Anthropic.
AI holdings suffered steep July falls
Multiple equities associated with the fund experienced significant declines throughout July. Sandisk continued to show losses of roughly 44% for the month despite finishing Thursday's trading session with a 26% gain. CoreWeave experienced a decline of nearly 26% during July, whereas Bloom Energy saw a reduction of approximately 32%, based on Yahoo Finance information.
Situational's regulatory disclosure with the US Securities and Exchange Commission revealed direct equity positions in each of these three corporations as of the end of March 31.
The identical disclosure document revealed approximately $1.11 billion in equity holdings across seven Bitcoin (BTC) mining corporations, which included Iren, Core Scientific, Riot Platforms and CleanSpark. Cointelegraph had previously documented that these holdings provided Situational with exposure to mining operations that were expanding into the AI and high-performance computing sectors through the repurposing of their electrical infrastructure and data center facilities.
At this time, it is not known which equities were included in the deal between Citadel and Situational or whether the fund has maintained any of its holdings in Bitcoin mining companies.
The name of Aschenbrenner's fund is derived from his essay series published in 2024, titled "Situational Awareness: The Decade Ahead," in which he presented the argument that artificial general intelligence might be achieved by 2027 and would generate massive demand for computational resources and electrical power.
Prior to his tenure at OpenAI, Aschenbrenner served on the five-person team of the FTX Future Fund and was a signatory to its resignation statement in November 2022 during the collapse of FTX.
Cointelegraph reached out to both Situational Awareness and Citadel requesting comment but had not received any response at the time of publication.