On July 30, Situational Awareness, the hedge fund run by former OpenAI researcher Leopold Aschenbrenner, rushed to sell most of its public stock portfolio, CNBC reported, citing sources.
Shares of bitcoin miners that the fund held as of March 31 rose 18%–30% in the latest trading session.
Overnight deal
Ken Griffin’s Citadel agreed to buy the Situational Awareness portfolio at a discount. According to Financial Times, it beat competing offers from Millennium Management and Jane Street. Bloomberg said both firms reviewed the assets but did not participate in the final deal. Goldman Sachs, JPMorgan Chase, Bank of America and Citigroup helped arrange the transaction, sources told Reuters.
The deal was put together in less than a day. Talks began Wednesday evening, and by Thursday morning the parties had agreed on terms. By then the fund was already seeking a single buyer for the entire block — selling pieces into a falling market would have hurt its own positions. Aschenbrenner offered competitors stocks worth more than $10 billion, The New York Times wrote. The outlet estimated the entire crisis unfolded over roughly a day and a half.
The full size of the deal remains unknown. WSJ, Reuters and FT reported on the bulk of the portfolio without specifying figures. According to WSJ, Citadel primarily took positions bought with leverage, while some unleveraged assets may have remained with the fund. FT valued Situational Awareness’s public holdings at about $16 billion before the transaction and called it one of the largest deals in the U.S. stock market.
After the agreement, the fund was left with about $10 billion in assets, including private investments. NYT noted that Wall Street reacted warily: the previous episode of a forced unwind by a major player — the 2021 Archegos collapse — led to losses at Credit Suisse.
Leverage worked against the fund
The fund was hit on two fronts, CNBC’s sources said. AI infrastructure bets fell especially hard: shares of Nebius Group, Sandisk, Micron and CoreWeave were down by more than 35% by the end of July. The sell-off also hit other large positions — SK Hynix and Bloom Energy. At the same time, a short bet against software developers, including Adobe, moved against Situational Awareness.
The fund built positions with borrowed money, so falling prices eroded loan collateral. Prime brokers Bank of America, Goldman Sachs and JPMorgan Chase demanded additional collateral. Reuters noted it was unclear whether the banks issued formal margin calls before the deal. Estimates of Situational Awareness’s size vary. A CNBC source put assets at $45 billion at their early July peak, while Bloomberg and FT cited $20–24 billion before the main sell-off.
A few weeks separated record performance from the fire sale. In a letter to investors dated July 24, Aschenbrenner said the fund gained 439% in January–June and 1,551% since launch. He acknowledged that the tech-sector sell-off affected the portfolio but called it a good time to buy. He invited clients to add capital starting August 1.
According to WSJ, by the end of July the loss reached about 67%. In the same letter, Aschenbrenner linked the scale of losses to short sellers working against Situational Awareness’s positions.
Major private holdings, including a stake in Anthropic, were not part of the Citadel agreement, but the fund also considered selling them. WSJ reported management had nearly agreed to sell its stake in the Claude developer for about $3.5 billion to a consortium led by Greenoaks and Sequoia Capital, but the deal was canceled. A Situational Awareness representative told CNBC that reports about selling this stake were inaccurate.
Greenoaks and Sequoia Capital had previously invested in Anthropic. In May, the company raised $65 billion at a $965 billion valuation in a round led by Altimeter Capital, Dragoneer, Greenoaks and Sequoia Capital. On June 1, the AI developer confidentially submitted a draft S-1 registration statement to the SEC. Aschenbrenner called the potential listing one of the key events of the second half of the year.
Impact on bitcoin miner stocks
By the close on July 30, IREN gained 30.54% to $38.26. Bitdeer added 24.72%, Riot Platforms 21.27%, CleanSpark 21.07%, Core Scientific 20.36%, and HIVE Digital 18.34%.
All six companies appeared in the fund’s Form 13F filing as of March 31:
- IREN — 11.7 million shares worth $401 million;
- Core Scientific — 26 million worth $389.1 million;
- Riot Platforms — 11.5 million worth $142.2 million;
- CleanSpark — 12.3 million worth $104.5 million;
- Bitdeer — 3.44 million worth $29.8 million;
- HIVE Digital — 3.39 million worth $6.4 million.
It is unclear whether the fund still held these shares immediately before the sale.
Company-specific news also supported IREN. On July 20, the company said it had signed new AI cloud contracts totaling $2.8 billion and raised its target annual AI Cloud revenue run rate for the end of 2026 to more than $4 billion. Management highlighted Microsoft, NVIDIA, Perplexity, Figure AI and other organizations among clients.
In July, Alphabet reported negative free cash flow for the first time due to large investments in AI infrastructure.
