Ken Griffin’s Citadel has reportedly acquired a major chunk of Situational Awareness’s public stock portfolio, a move coming on the heels of the hedge fund's sharp losses during the July artificial intelligence stock market downturn. The Financial Times was first to break the news of Citadel’s purchase of a significant portion of the portfolio, following a month in which Situational Awareness’s fund plummeted roughly 67 percent. This dramatic drop was driven by a broader correction in AI-linked equities.
Fund’s Yearly Gains Don’t Offset July Rout
Although the fund took a major hit in July, its performance for the year as a whole remained strong. A letter sent to investors stated the fund was still up about 80 percent for the year. Earlier reports had revealed even greater gains, with the fund surging 439 percent through June. The sharp market turn forced Situational to seek additional capital, with existing investors and lenders being approached. Some investors were offered the opportunity to acquire assets from the portfolio to maintain their stake.
The fund reportedly reached an agreement in late July to sell $3.5 billion in Anthropic shares to a group led by Greenoaks and Sequoia Capital. However, the deal was reportedly pulled off Thursday morning, leaving the fund still holding about $10 billion in assets, including its valuable stake in Anthropic.
AI-Linked Stocks Take a Beating
Multiple equities associated with Situational Awareness saw severe losses in July, contributing to the fund’s overall decline. Sandisk, for example, dropped around 44 percent for the month, despite a slight rebound in Thursday’s closing. CoreWeave dropped nearly 26 percent, and Bloom Energy fell roughly 32 percent, as per Yahoo Finance data.
Situational Awareness’s March 31 SEC filing revealed it had direct equity positions in these three stocks. The same report listed holdings in seven Bitcoin mining firms, including Iren, Core Scientific, Riot Platforms, and CleanSpark, valued at around $1.11 billion. Cointelegraph has previously highlighted how these positions provided Situational with exposure to miners shifting into AI and high-performance computing by repurposing their existing power and data infrastructure.
Founder Foresees AGI By 2027, FTX Ties
Leopold Aschenbrenner, the founder of Situational Awareness, was previously a member of the FTX Future Fund team. He left the company in November 2022 as FTX faced collapse. His 2024 essay series, “Situational Awareness: The Decade Ahead,” argued that artificial general intelligence could emerge as early as 2027, triggering a surge in demand for computing resources and energy.
Situational Awareness, named after the essay, took an AI-focused investment strategy, including Bitcoin miners transitioning into AI computing. The fund’s strategy aligned with Aschenbrenner’s vision of future computing needs. However, it is still unclear which stock positions were included in the transaction with Citadel or whether the fund continues to hold any of its Bitcoin miner shares.