Jane Street Loses $15B in AI Fund Blowup

Batty's internal note struck a defensive but not alarmed tone. "Despite the large year-to-date increase in trading capital, the recency of these losses has caused us to locally be more selective about risk," he said. "We've closed a significant portion of our risk in the specific areas we lost on in July, and have also reduced risk-taking in other strategies."

He added that desks have cut exposure in the strategies that drove the volatility: "Our positions currently seem appropriate for our present risk tolerance. Market volumes have been strong, and we've continued to make improvements to our short time horizon strategies, that trading seems more profitable than ever."

On the fund itself, Jane Street said Situational Awareness' drawdown left its stake flat on the year — but noted the investment is still up over the life of the bet.

The New York Post reported executives called July a "bad month" and blamed the drawdown at Aschenbrenner's fund for contributing to the firm's poor performance. The Post dubbed him the "Nostradamus of AI."