--- title: "From 439% Profit This Year to Urgent Fundraising: The All-in AI Fund Founded by a Former OpenAI Employee Can No Longer Cope" type: "News" locale: "en" url: "https://longbridge.com/en/news/294341352.md" description: "Situational Awareness, a $20 billion hedge fund founded by a former OpenAI employee, posted a staggering 439% return in the first half of the year by heavily leveraging its positions in the AI sector. However, it has suffered severe drawdowns amid the recent slump in tech stocks and now faces a liquidity crisis. The fund is seeking emergency financing and a new round of subscriptions, advising investors to buy the dip, but its high leverage and lean team have raised serious questions about its risk management capabilities" datetime: "2026-07-30T10:09:46.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/294341352.md) - [en](https://longbridge.com/en/news/294341352.md) - [zh-HK](https://longbridge.com/zh-HK/news/294341352.md) --- # From 439% Profit This Year to Urgent Fundraising: The All-in AI Fund Founded by a Former OpenAI Employee Can No Longer Cope Situational Awareness, the hedge fund founded by former OpenAI employee Leopold Aschenbrenner, is experiencing a rapid reversal from star performer to liquidity crisis. According to the Financial Times, citing people familiar with the matter, the fund, which manages $20 billion in assets, has recently sought new financing from existing investors and lenders, while offering some investors the option to purchase assets from its portfolio. Previously, the fund achieved a net return of as high as 439% in the first half of this year by heavily investing in AI-related stocks and employing a high-leverage strategy, far outperforming similar funds on Wall Street. However, as AI stocks faced massive sell-offs recently, the net asset value of Situational Awareness shrank sharply. Multiple sources stated that **the fund had previously levered up extensively to amplify returns, a strategy that similarly multiplied losses during the market downturn.** Currently, the fund's founder, Aschenbrenner, has sent a letter to investors describing the current market correction as a rare opportunity to increase positions, paving the way for a new round of capital subscriptions opening on August 1. ## From Spotlight to Crisis, the Reversal Was Severe According to a semi-annual performance letter dated July 24 and obtained by the Financial Times, **Aschenbrenner disclosed that Situational Awareness achieved a net return of 439% by the end of June—a figure rare in the hedge fund industry.** In the letter, Aschenbrenner acknowledged that the fund was "not immune to market turmoil," noting that severe volatility in Asian markets had a significant impact on the fund's net asset value. However, he also stated that the substantial correction in tech stocks created "the most attractive investment opportunity since early 2025." At the end of the letter, he put it bluntly: "If you have been waiting for the right time to add to your position, now might be it." However, according to several people familiar with the fund's operations, within days of the letter being sent, the fund had contacted investors and lenders in a somewhat ad hoc, non-systematic manner to seek new capital injections. ## Leverage Is a Double-Edged Sword The excess returns of Situational Awareness were largely built on highly leveraged bets on the AI sector. The fund significantly amplified its investment positions through borrowing, a common yield-enhancement strategy for hedge funds, but one that also multiplies downside risk. According to its latest regulatory filings, several of the fund's major holdings suffered heavy losses during recent market volatility. Oracle and AMD both fell by approximately 20% this month. Other smaller holdings experienced even more significant declines, including "new cloud computing" companies Nebius and Sharon AI, energy startup Bloom Energy, and several memory chip companies (such as SanDisk). From a macroeconomic perspective, the US Nasdaq 100 Index, dominated by tech stocks, has accumulated a 10% decline since July, while the Korea Composite Stock Price Index (Kospi) has fallen by about one-third. Furthermore, according to its latest regulatory filings, the fund lists several major Wall Street banks as its prime brokers, reflecting its heavy reliance on external credit for its financing structure. ## Large Fund Size, Yet an Extremely Lean Team Despite managing assets worth $20 billion, Situational Awareness operates with a highly lean team. According to the latest regulatory filings, the fund has only four investment professionals and a total staff of eight. Aschenbrenner had no prior trading experience before founding this fund. After leaving OpenAI, he wrote a lengthy article titled "Situational Awareness" in 2024, detailing his predictions that artificial intelligence would profoundly reshape human society. The article circulated widely in Silicon Valley's tech circle and became the blueprint for the fund's establishment. He currently has over 250,000 followers on the X platform. The fund's early investor lineup was quite impressive, including Stripe co-founders Patrick and John Collison, former GitHub CEO Nat Friedman, tech investor Daniel Gross, and the trading firm Jane Street. ## Betting on H2 AI Catalysts Facing current pressures, Aschenbrenner maintained an optimistic stance on the prospects of the AI industry in his investor letter. **He listed Anthropic's expected initial public offering (IPO) as one of the key catalysts that could drive a market recovery, believing that the AI sector will see significant progress in the second half of the year.** His investment philosophy has always relied on what he calls "public information, personal judgment, industry knowledge, and news from the San Francisco circle." At the inception of the fund in 2024, he wrote: "Soon, the whole world will realize (the transformative power of AI). But right now, perhaps only a few hundred people—mostly in San Francisco and at major AI labs—have true insight into this." Reality is now testing this judgment. Situational Awareness did not respond to multiple requests for comment from the Financial Times. ### Related Stocks - [OpenAI.NA](https://longbridge.com/en/quote/OpenAI.NA.md) - [ORCL.US](https://longbridge.com/en/quote/ORCL.US.md) - [AMD.US](https://longbridge.com/en/quote/AMD.US.md) - [NBIS.US](https://longbridge.com/en/quote/NBIS.US.md) - [BE.US](https://longbridge.com/en/quote/BE.US.md) - [SNDK.US](https://longbridge.com/en/quote/SNDK.US.md) - [.NDX.US](https://longbridge.com/en/quote/.NDX.US.md) - [ORCL-D.US](https://longbridge.com/en/quote/ORCL-D.US.md) ## Related News & Research - [In the Hugging Face breach, OpenAI’s hacker was noisy and fast — but not unstoppable](https://longbridge.com/en/news/294384788.md) - [Meet the Gen Z AI whiz at the center of a hedge fund meltdown](https://longbridge.com/en/news/294425537.md) - [The loss of Situational Awareness](https://longbridge.com/en/news/294416313.md) - [The AI Hangover Has Arrived](https://longbridge.com/en/news/294191198.md) - [New details in the OpenAI Hugging Face hack show how far agents will go: 'It's now remarkably easy'](https://longbridge.com/en/news/294375248.md)