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AI hedge fund Situational Awareness sheds assets after margin calls
Assets at Situational Awareness fell from $45 billion at the start of July to about $10 billion after a semiconductor selloff triggered margin calls.
LiveMint Markets reports that Leopold Aschenbrenner’s AI-focused hedge fund, Situational Awareness, took major losses after semiconductor stocks tumbled, leading to margin calls and forced position sales.
According to the report, the fund’s assets dropped from $45 billion at the start of July to about $10 billion, as Aschenbrenner was required to offload leveraged stock bets including positions in SK Hynix and CoreWeave.
Aschenbrenner attributed the problem to risk and liquidity, saying in a late Thursday letter to investors that keeping the portfolio within risk parameters became harder as positions moved against it and market liquidity dried up.
The report adds that lenders previously extended financing at several times the fund’s capital, but proved unwilling to continue as tech stocks slid, and some experts pointed to the fund’s heavy reliance on a single sector as a key vulnerability.