At 25, Leopold Aschenbrenner's AI hedge fund imploded 50% in a month—Citadel just bought the wreckage

The spectacular rise and sudden fall of Situational Awareness, the AI-focused hedge fund started by 25-year-old former OpenAI wunderkind Leopold Aschenbrenner, now has a buyer for its charred remains: Ken Griffin’s Citadel. After rocketing to a reported 439% return through June and amassing peak assets of $45 billion, the fund’s highly leveraged bets on AI infrastructure got crushed in a brutal sector rotation. Stocks like SK Hynix, Sandisk, and Bloom Energy all shed over 30% in a month, and those losses were mercilessly amplified by the fund’s use of borrowed money. That forced a fire sale, with Citadel—a firm famous for swooping in when leveraged players are forced to unwind—purchasing the bulk of Situational Awareness’s public stock portfolio. Post-sale, the fund’s assets have collapsed to roughly $10 billion, down from $20 billion in recent months.

Aschenbrenner’s rise was as swift as it was unlikely. A Columbia valedictorian at 19, he joined OpenAI’s “superalignment” team in 2023 before being fired a year later for what the company called an improper disclosure of information. With zero trading experience, he launched Situational Awareness in 2024, attracting early money from names like Jane Street, Stripe’s Collison brothers, and Meta executives. His core thesis—that scaling AI demanded a massive, underappreciated build-out of semiconductors, energy, and compute—was prescient, and for a while, it printed money.

But prescience doesn’t protect you from timing or leverage. As public market investors soured on AI’s near-term revenue potential relative to its colossal capex demands, the thesis that made Aschenbrenner a star became the anvil that sank his fund. Even as losses mounted, he was defiant. In a late July letter to investors, he called the selloff one of the best buying opportunities since early last year and asked for fresh capital. The appeal flopped.

Citadel’s purchase isn’t a pure vulture play. Griffin’s fund already held some of the same AI infrastructure names, suggesting a shared long-term conviction—just with a balance sheet that can actually survive the volatility. The twist? Situational Awareness didn’t sell its private investments. It still holds a $5 billion stake in Anthropic, a company last valued at $965 billion and expected to IPO as soon as October. A windfall there could theoretically make the public-market bloodbath look like a footnote, provided the private marks hold up.