AI hedge fund Situational Awareness may have sold its public portfolio, but it still has its Anthropic shares

Core Impact Points

• Situational Awareness, a hedge fund formed by former OpenAI researcher Leopold Aschenbrenner, has sold its public stock portfolio to Ken Griffin's Citadel due to steep losses.
• The fund's losses were amplified by leverage, a common hedge fund strategy of using borrowed money to buy stocks, and its assets fell to around $10 billion from $20 billion in recent months.
• Despite the losses, Situational Awareness still holds a $5 billion stake in Anthropic, which is expected to go public soon and could potentially offset some of the hedge fund's losses.
• Aschenbrenner, who has been described as both 'scarily smart' and 'brash,' has been a rising star in the hedge fund industry, but his fund's losses have been significant, with some of its holdings plummeting by over 30% in the past month.
• Citadel's purchase of Situational Awareness' public portfolio is a familiar pattern for the hedge fund, which has a reputation for stepping in to snap up attractive assets when leveraged players are having to unwind themselves.
• The sale of Situational Awareness' public portfolio could have implications for the US market, as it may lead to a decrease in demand for AI infrastructure stocks, which have been a key focus of the hedge fund's investment strategy.