Citadel buys bulk of Situational Awareness equity book

Citadel has acquired the majority of the public equity portfolio of AI-focused hedge fund Situational Awareness after the firm suffered steep losses in July and dismantled much of its leveraged book.

The transaction transfers most of the fund’s listed equity positions, including the portion financed through prime brokerage leverage, to Ken Griffin’s multi-strategy firm. Executives at Goldman Sachs, JPMorgan Chase, Bank of America and Citigroup helped arrange the transfer and the mechanics of the transaction.

Situational Awareness, founded by former OpenAI researcher Leopold Aschenbrenner and launched in 2024, posted large gains earlier in 2026 from concentrated positions in AI-linked companies. Returns of about 439% in the first half of 2026 attracted capital from institutional investors and notable technology backers.

A sharp reversal in technology and AI stocks in July erased a substantial portion of those gains. People familiar with the situation estimate the fund lost roughly two-thirds of its value during the month and chose to liquidate much of its public equity book rather than seek new capital. Leopold Aschenbrenner attributes part of the decline to aggressive short-selling in several of the fund’s holdings.

Citadel assumed the tranche of the portfolio that had been financed through prime brokerage leverage. Situational Awareness is expected to retain about $10 billion in assets comprising remaining public equity positions and private investments. The fund’s stake in AI company Anthropic was not included in the sale and remains a core holding. Public equity positions involved in the transaction reportedly included shares in Broadcom, Intel and CoreWeave.

Situational Awareness had attracted early backing from firms and individuals such as Jane Street, Stripe co-founders Patrick and John Collison, and technology executives Daniel Gross and Nat Friedman. After the July sell-off, the firm considered potential capital raises but ultimately disposed of most of its listed holdings.

With roughly $71 billion in assets under management, Citadel has frequently provided liquidity during periods of market stress and has the capacity to take on leveraged positions others moved away from. The long-term effect on Situational Awareness’s strategy and investor base will depend on how the fund manages its remaining portfolio and whether it pursues new capital or restructuring options.