August 1, 2026
According to CNBC, Situational Awareness, the AI-focused hedge fund run by former OpenAI researcher Leopold Aschenbrenner, was forced to unwind its entire public equity book at the end of July after margin calls from its prime brokers. The fund held roughly $45 billion in assets at the start of the month and about $10 billion by July 30.
The fund launched in July 2024 around the thesis that increasingly capable AI systems would drive demand for semiconductors, memory, data centers, and power infrastructure. That position returned 439% net in the first half of 2026 and more than 1,000% after fees since inception. It was carried with leverage of roughly four times, and about two-thirds of assets sat in public long and short equities.
A momentum reversal in July hit both sides of the book. Long positions in AI infrastructure names including Nebius Group, SanDisk, Micron, CoreWeave, and SK Hynix each fell more than 35% during the month, while software shorts such as Adobe rallied. Declining collateral values triggered margin calls from Goldman Sachs, JPMorgan Chase, and Bank of America; selling to meet them pushed the same names lower and generated further losses. Citadel purchased roughly two-thirds of the public equity holdings at below-market prices. What remains is about $5 billion, primarily a stake in Anthropic, with the firm expected to operate as a private investment vehicle.
This is important for recruiting because candidates can use the episode to explain leverage, prime brokerage margin requirements, and how forced deleveraging converts paper losses into realized ones. It also provides a concrete example of concentration risk in a crowded trade, which is a frequent talking point in markets, sales and trading, and hedge fund interviews.