JPMorgan ends lending to AI hedge fund Situational Awareness

JPMorgan Chase has ended its financing relationship with Situational Awareness, the AI-focused hedge fund, after the fund incurred heavy losses on leveraged positions in artificial‑intelligence and semiconductor stocks.

According to a person familiar with the matter, the fund faced a margin call in July during a global sell-off in chip stocks. To meet financing requirements and reduce exposure, the firm sold most of its public equity holdings, including a bulk of positions sold to Citadel.

JPMorgan had been one of the fund’s main lenders and informed Situational Awareness it would no longer provide financing. Goldman Sachs, Citigroup and Bank of America continue to act as brokers for the fund, and New York brokerage Clear Street has recently begun working with it.

Situational Awareness was founded by Leopold Aschenbrenner, a former researcher at OpenAI. The firm focuses on investments tied to artificial intelligence and used leverage that amplified losses when AI and semiconductor shares dropped.

JPMorgan, Goldman Sachs, Citigroup and Bank of America declined to comment. Situational Awareness did not respond to requests for comment.