AI hedge fund sells entire portfolio to Citadel
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- Situational Awareness sold its complete public equities portfolio to Citadel, a deal first reported by the Wall Street Journal and confirmed to Axios by a source, amid a recent sell-off in AI stocks — especially chipmakers.
- Leopold Aschenbrenner founded the AI-focused fund in 2024 after being fired from OpenAI over an alleged information leak he disputes, and the firm had grown to roughly $20 billion in assets under management before the unwind.
- Early backers of the fund included Stripe cofounders Patrick and John Collison, former GitHub CEO Nat Friedman, and ex-Apple employee Daniel Gross.
- The Financial Times reported just one day earlier that the fund was scrambling to raise fresh capital after heavy losses during the AI stock rout — suggesting the portfolio sale followed a failed fundraising push.
- Citadel, the hedge fund run by billionaire Ken Griffin, is the acquirer, taking on the positions at a moment when AI-focused equity strategies are under acute pressure.
Why it matters: A $20 billion AI-focused hedge fund — launched by a high-profile former OpenAI researcher and backed by tech luminaries — capitulating and handing its entire stock book to Citadel is a stark signal that even the most AI-bullish professional money has reached a pain threshold, with the FT reporting heavy losses in the same week the fund sought fresh capital.
