The AI trade that minted spectacular gains has delivered an equally spectacular reckoning. A rout in infrastructure stocks has forced a high-profile hedge fund to unwind, while one of its early backers, Jane Street, reportedly suffered a $15 billion monthly hit.

Situational Awareness, founded in 2024 by former OpenAI researcher Leopold Aschenbrenner, had ridden a bullish thesis that AI would demand vast new spending on chips, computing power, memory and energy. The wager initially worked: the fund returned 439% through June and reportedly grew to as much as $45 billion at its peak.¹

Jane Street was among the fund’s early backers. But as AI infrastructure shares sank — with several holdings reportedly down more than 30% in a month — leverage turned a sector correction into a far more punishing retreat. Jane Street then recorded its first losing month in roughly a decade, with the loss reported at $15 billion.²

Aschenbrenner had urged investors to see the sell-off as an opportunity, calling it “one of the best buying opportunities since early last year.”¹ Fresh commitments did not materialize as hoped, however, and the fund moved rapidly to shed its listed positions.

Axios reported that Situational Awareness sold “all of its public equities portfolio” to Ken Griffin’s Citadel.³ Other reporting described the transaction as a sale of the majority or bulk of the portfolio — a distinction that underscores how quickly the unwind developed, rather than a clear disagreement over its direction.¹

For Citadel, the purchase represents a different reading of the same collapse: distressed sellers may be exiting, but the underlying AI buildout could still reward investors able to wait. Citadel had already owned some similar infrastructure bets and stepped in as the buyer of Situational Awareness’s equity holdings.⁴

The fund has not abandoned AI altogether. It retained private investments, most notably an Anthropic stake reportedly valued at $5 billion — leaving Aschenbrenner with a potential recovery engine even after the public-market trade imploded.¹