Situational Awareness—the AI-focused hedge fund that briefly captured Wall Street’s attention—is enduring a brutal stretch. Helmed by Leopold Aschenbrenner, a twenty-something former OpenAI researcher, the firm bet heavily on artificial intelligence ventures and, for a time, saw explosive gains. But a late-July slump in AI stocks wiped out billions in value. Now, federal regulators are reportedly circling as well.

According to *The New York Times*, the Securities and Exchange Commission has issued subpoenas to banks that worked with the fund—specifically those overseeing its trades and providing financial backing. The government has reportedly told these institutions to “preserve any information” tied to the hedge fund, though it’s worth noting that Situational Awareness hasn’t been accused of any misconduct.

The fund, which loudly tied its fortunes to AI’s meteoric rise, might now stand as a cautionary tale about the industry’s supposedly unstoppable momentum.