Situational Awareness, the $20 billion hedge fund founded by ex-OpenAI executive Leopold Aschenbrenner, is seeking to raise new capital after suffering heavy losses during the recent sell-off in AI-related stocks. [1, 4] The fund, which had posted a meteoric net return of 439% for the year through June, was hit hard by the July downturn in the technology sector. [1, 2, 3]
The sharp reversal was amplified because the fund used borrowing to magnify its bets, a strategy that increases both gains and losses. [1, 5] The fund has held talks with existing investors and lenders and, in a letter to investors, Aschenbrenner framed the sell-off as a buying opportunity, opening a window for new capital on August 1. [1, 4]