Aschenbrenner's Situational Awareness Fund Loses $35 Billion as Leveraged AI Bets Reverse
Updated
Updated · The FP · Aug 4
Aschenbrenner's Situational Awareness Fund Loses $35 Billion as Leveraged AI Bets Reverse
3 articles · Updated · The FP · Aug 4
Summary
$35 billion was wiped from Situational Awareness in roughly two weeks in late July, erasing most of the gains that had lifted the fund to a $45 billion peak.
AI stocks Aschenbrenner favored — including data-center builders and chipmakers — fell more than 30%, while software companies he had shorted rose by similar amounts.
Heavy borrowing amplified the reversal, turning what had been an extremely concentrated, high-conviction portfolio into a rapid collapse rather than a hedge.
The 25-year-old manager had drawn investors after the fund reportedly surged 1,000% since launch and 270% in the first five months of 2026, making the crash a stark warning about leverage in crowded AI trades.