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Crowded AI trades, not short-sellers, blamed for Situational Awareness losses

S3 Partners said Situational Awareness’s sharp drawdowns stemmed from concentrated, leveraged positions in crowded AI trades.

Reported · Written up by our desk · Hedge Funds

Hedgeweek reports that sharp losses at the hedge fund Situational Awareness were driven by how the fund positioned into AI-related markets, rather than by a coordinated short-seller attack.

According to a Bloomberg-cited analysis from S3 Partners, the losses reflected concentrated and leveraged exposure tied to crowded AI trades, according to Hedgeweek.

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