Sandisk

AI Hedge Fund Situational Awareness Forced Sale, Citadel Buys Portfolio

Leopold Aschenbrenner, a 24-year-old former OpenAI Superalignment team member, founded the AI-focused hedge fund Situational Awareness LP after stints at the FTX Future Fund and OpenAI. The fund grew rapidly—peaking near $45 billion—on concentrated bets in AI infrastructure and semiconductors, but suffered severe July 2026 losses that forced the sale of public holdings. Citadel purchased much of the remaining public portfolio. Situational Awareness reported a 439% net gain through June 2026 but faced margin pressure from declines in names like SK Hynix, Micron, SanDisk, CoreWeave and Nebius. The fund was backed by angel investors and firms including Jane Street and had significant Anthropic exposure, reportedly retaining roughly $5 billion in Anthropic shares.

European Markets Mixed as Tech Earnings Drive Moves

European and global equity markets showed mixed trading on 2026-07-31 after major US tech earnings and regional corporate reports. Germany’s DAX closed marginally higher at 25,629 points (+0.07%) while the MDax fell 0.73% to 31,980.52. Tech names led gains after strong quarterly results from Microsoft and Amazon, with Amazon shares jumping about 15%. Notable movers included Infineon, Aixtron and Siltronic on the upside, while Schaeffler plunged over 12% after cutting mid-term targets. US indices were mixed: the Nasdaq 100 finished slightly up, Apple’s stock dropped on a weak outlook, and energy names ExxonMobil and Chevron reported divergent quarterly outcomes. South Korea’s Kospi experienced an extreme chip-led surge intraday. Oil prices eased amid signs of increased shipping flows through the Strait of Hormuz.

AI Funding Risks: Hedge Fund Collapse and Nvidia Financing

A recent rout in AI and chip stocks exposed fragilities in the AI funding boom, illustrated by Situational Awareness — a leveraged San Francisco hedge fund led by Leopold Aschenbrenner — which sold its public stock portfolio to Citadel after margin calls created a liquidity crisis. The piece flags vendor financing risks as Nvidia has made large, hardware-linked investments and commitments (including a reported $5 billion commitment to Ilya Sutskever’s Safe Superintelligence and reported talks to guarantee up to $250 billion for OpenAI). Corporate venture capital and new financial actors (big managers and private credit) now dominate AI financing, while special purpose vehicles (SPVs) are outpacing direct secondary trades on some platforms, underscoring evolving—and potentially systemic—financing risks for the AI buildout.