Citadel Dumps 80% of Aschenbrenner's Collapsed AI Portfolio
Citadel Dumps 80% of Aschenbrenner's Collapsed AI Portfolio
The News
Ken Griffin's Citadel has shed more than 80% of the risk from the Situational Awareness portfolio it bought at a discount in late July, Griffin told investors in a letter reported Friday.
The exit ran through nearly 100 block trades worth more than $4 billion in market value, according to the Financial Times and Reuters.
Situational Awareness, the AI-focused fund run by Leopold Aschenbrenner, had been forced to sell all of its public stock positions after steep losses.
Timeline
Before the market downturn, Situational Awareness had grown to roughly $45 billion, built on a heavy bet that AI demand would drive chip, memory and data center stocks higher.
Margin calls and forced sales drained the fund. Its largest holdings — Nebius Group, SanDisk, Micron and CoreWeave — had each lost more than 35% before a partial rebound.
In late July, Citadel bought the portfolio at a 10% discount to already depressed prices.
July was Citadel's Wellington fund's best month since 2022, up 5.9%, pushing its 2026 return to 12%.
On Friday, Aug. 21, Reuters, the Financial Times, IBTimes and ZeroHedge reported the contents of Griffin's letter to investors.
Reactions
"To date, we have successfully shed more than 80% of the aggregate risk from the original portfolio," Griffin wrote, according to ZeroHedge.
Griffin credited Citadel's bank trading and prime brokerage teams with enabling the rapid transfer of the portfolio.
ZeroHedge read the letter as Griffin making clear he had no intention of holding volatile memory and chip stocks any longer than necessary. Coverage split on the same facts: whether the quick exit was smart opportunism, or a signal that the underlying AI names lack staying power.
What's Next
Citadel still holds a remaining slice of the original Situational Awareness positions, and has not said who absorbs the rest.
Open questions: whether the AI stocks sustain their partial rebound without a large buyer, and what happens to Aschenbrenner's fund and its investors after the liquidation.
More
Aschenbrenner had been in talks to sell Situational Awareness's stake in Anthropic before the collapse.
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