Leopold Aschenbrenner’s hedge fund, Situational Awareness, has offloaded the majority of its publicly traded stock portfolio to Ken Griffin’s Citadel, following steep losses over the past month. The Wall Street Journal reported the news on Thursday, marking a dramatic fall for the young investor—described alternately as “scarily smart” and “brash.”

Aschenbrenner, a 25-year-old German native, had no prior trading experience when he launched the fund in 2024. He first gained attention for his investment thesis after publishing essays arguing that scaling artificial intelligence would require a massive buildup in semiconductors, compute power, memory, and energy infrastructure. He joined OpenAI’s “superalignment” team in 2023, two years after graduating as valedictorian from Columbia at age 19 (he enrolled at 15). But he was fired from the company a year later for what OpenAI described as an improper disclosure of internal information. At the time, that team was led by OpenAI co-founder Ilya Sutskever and AI researcher Jan Leike. Soon after, Sutskever left to start his own company, Leike joined rival Anthropic, and Aschenbrenner launched his fund.

Things were going smoothly for Situational Awareness until very recently. The fund returned 439% for the year through June, according to the Financial Times. Assets under management reportedly swelled to as much as $45 billion at their peak before the fund’s positions began to drop sharply amid a broader decline in AI infrastructure investments, CNBC reported. Even after losses mounted, Aschenbrenner remained unfazed. In a July 24 letter to investors seen by the FT, he described the selloff as one of the best buying opportunities since early last year and invited clients to commit fresh capital starting August 1. According to Bloomberg, the appeal did not generate the commitments he had hoped for.

Some of the hardest-hit stocks in the fund included memory chip producers SK Hynix and SanDisk, clean energy developer Bloom Energy, and neocloud provider Nebius Group—all of which have fallen by more than 30% over the past month. AI infrastructure equities declined as public investors grew concerned that massive capital expenditures were not translating into near-term revenue. The fund’s losses were amplified by leverage, a common hedge fund strategy of using borrowed money to buy stocks.

After Citadel acquired the bulk of those holdings, Situational Awareness’ overall assets fell to roughly $10 billion, Bloomberg reported, down from around $20 billion in recent months, per an earlier WSJ report. Situational Awareness raised several hundred million dollars at its outset. Early backers include quant-trading firm Jane Street, Stripe co-founders Patrick and John Collison, and Meta executives Daniel Gross and Nat Friedman.

Citadel’s purchase fits a familiar pattern for the firm. Ken Griffin’s hedge fund has a reputation for stepping in to snap up attractive assets when leveraged players are forced to unwind. Even before picking up some of Situational Awareness’ holdings, Citadel’s portfolio featured some of the same AI infrastructure bets, suggesting that—like Aschenbrenner—Griffin expects the sector to recover and has the patience to wait it out.

Situational Awareness did not, however, sell its investments in private companies, according to multiple reports. Most notably, it continues to hold a stake in Anthropic that is currently valued at $5 billion, according to Bloomberg, and which many view as an asset that continues to appreciate. Indeed, Anthropic was last valued at $965 billion in a Series H round in May, and it is expected to go public as soon as October, potentially at an even higher valuation. It is conceivable that a windfall from the sale of those shares could offset some of the hedge fund’s public-market losses. Other private investments in Situational Awareness’ portfolio include chipmaker MatX and AI data center startup Fluidstack, which was reportedly in talks in April to raise a new round at an $18 billion valuation.