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A.I. hedge fund Situational Awareness raised $100 million, then collapsed
The fund, launched in 2024, quadrupled investor money in months while later borrowing tens of billions from banks for larger bets, before running into fundraising resistance in New York.
The New York Times reports that Leopold Aschenbrenner launched the artificial intelligence-focused hedge fund Situational Awareness in 2024 at age 22, after departing OpenAI amid controversy and publishing a viral essay that forecast an AI revolution.
According to the report, the fund drew major attention after Aschenbrenner raised $100 million from tech figures last year and quickly ramped up investments in AI-linked startups, chipmakers, and data center companies, with the fund subsequently reporting investment returns that quadrupled investor money in a matter of months.
The Times says Situational Awareness also took on substantial leverage, borrowing huge sums, described as tens of billions of dollars, from Wall Street banks to support increasingly large bets.
However, the report adds that when Aschenbrenner toured New York during his fundraising push last summer, he faced a cool reception from some potential backers, and Blackstone declined to invest, with critics characterizing the founder as a one-hit wonder, while one investor said Aschenbrenner did not offer a detailed fallback plan if the AI boom did not materialize.