Leopold Aschenbrenner's situational awareness shuts $20B-$24B portfolio after AI slump
Leopold Aschenbrenner's hedge fund, Situational Awareness, just shut down its $20 billion to $24 billion portfolio after big bets on AI stocks went south.
The fund tried to cash in with risky moves, using borrowed money to boost gains and betting against software companies, but when AI shares dropped hard, things unraveled fast.
Major banks stepped in to help manage the fallout and keep things from getting messy.
Situational Awareness's 439% June gains collapsed
The fund was riding high with a whopping 439% return by June, thanks to the AI stock boom.
But that same strategy backfired in July: stocks like Micron crashed over 35%, and short bets against companies like Adobe didn't pan out.
On top of that, the broader market took a hit, Nasdaq 100 fell about 10%, and South Korea's Kospi lost nearly one-third of its value, making it even tougher for the fund to recover.
It's a reminder that playing big with leverage can be risky when markets turn quickly.