Leopold Aschenbrenner built one of the most talked-about hedge funds in recent memory on a simple thesis: artificial intelligence is the most important technology of our lifetimes, and you should bet the house on it. In July 2026, the house caught fire.
Situational Awareness, Aschenbrenner’s fund named after his viral 2024 essay series on artificial general intelligence, suffered a 67% drawdown in a single month. The fund peaked at roughly $45 billion in assets under management before cratering to approximately $10 billion as a sector-wide selloff erased an estimated $3 trillion in AI market capitalization.
The anatomy of a blowup
The damage came from exactly the kind of positioning that makes risk managers lose sleep. Situational Awareness held heavily concentrated long positions in AI hardware and semiconductor stocks, specifically SK Hynix, Nebius, and Micron. On the other side of the trade, the fund was short software companies like Adobe.
From $254 million to $45 billion and back
