Leopold Aschenbrenner's hedge fund, Situational Awareness, appears to have loaded up on artificial intelligence stocks just before a significant market downturn in July, a move revealed in a recent 13F filing. The fund's top five holdings at the end of June included Sandisk, Micron Technology, Bloom Energy, Taiwan Semiconductor Manufacturing, and Nebius Group. All of these experienced substantial declines in July, contributing to the fund's precarious financial situation and forcing a large portfolio sale to Citadel.
Sandisk, previously the fund's largest U.S. holding at $5.7 billion, saw a nearly 47% drop in July. Micron, with $5.6 billion, fell by almost 29%. Bloom Energy experienced a 32% decrease, Taiwan Semiconductor lost 15%, and Nebius Group slumped by 31%. The filing indicates Aschenbrenner was actively increasing positions in these very stocks before the AI trade reversed course.
Additionally, Situational Awareness held $745 million in CoreWeave, another AI infrastructure company impacted by the July sell-off. The fund's strategy had centered on capitalizing on the AI boom by investing in companies providing essential infrastructure like memory chips, data centers, and power, while simultaneously shorting software companies perceived as vulnerable to AI disruption. This strategy had been remarkably successful, reportedly yielding gains exceeding 1,000% since its inception, and at its peak, the fund managed approximately $45 billion in assets.
However, the abrupt reversal in its core AI bets, combined with losses on the short side of its portfolio and the use of leverage, led to a severe liquidity crunch. By July 30, the fund was compelled to sell its leveraged stock positions, including heavily affected companies like SK Hynix and CoreWeave, to Ken Griffin's Citadel at a discount. This forced liquidation reduced the fund's holdings to around $10 billion. It's important to note that the 13F filing only reflects U.S.-listed long positions as of June 30 and does not offer a comprehensive view of Situational Awareness's full exposures or the specific trades that led to its downfall.
