Leopold Aschenbrenner’s Investor Letter After Situational Awareness’ Meltdown

Leopold Aschenbrenner told investors that Situational Awareness “came closer to permanent capital impairment than is acceptable to us,” according to Business Insider. The letter framed the fund’s July turmoil as a failure to maintain enough resilience, even while acknowledging that volatility can be part of long-term investing. Aschenbrenner wrote that he would “learn the necessary lessons from this experience” and said he took full responsibility for the events.

Business Insider reported that the AI-focused hedge fund was forced to sell the bulk of its public equities portfolio to Ken Griffin’s Citadel due to margin calls. The fund had used borrowed money from banking partners to amplify bets on companies including SanDisk, SK Hynix, and CoreWeave. Those positions slumped in July, forcing sales to meet collateral requirements with lenders.

Aschenbrenner’s letter gave an unaudited interim estimate of a 67% net month-to-date loss and an 80% net year-to-date gain. Business Insider reported that the fund launched in early 2025 with less than $1 billion and swelled to $45 billion at the start of July before the downturn. The fund also retained its stake in Anthropic, according to a person close to the firm cited by Business Insider.

The letter said the fund was not shut down, liquidated, or transformed into a private-only fund. Aschenbrenner wrote that Situational Awareness would continue as a hybrid public-private fund, but would manage its public book on a fully-paid-for basis while reviewing lessons from the episode. He also pointed to changes across portfolio management, risk, and vigilance as priorities for rebuilding resilience.