Situational Awareness fund liquidated leveraged semiconductor bets after margin calls erased $35 billion in assets.
A hedge fund focused on AI stocks saw its assets plummet from $45 billion to $10 billion within days. The fund, run by former OpenAI researcher Leopold Aschenbrenner, was forced to sell leveraged positions in semiconductor stocks like SK Hynix and CoreWeave at a discount to meet margin calls.
Before the collapse, the fund had surged over 1,000% since inception, drawing attention from Wall Street and tech circles. Its rapid decline highlights the volatility in AI-driven investments, particularly in semiconductor stocks, which have faced sharp corrections.
The fund’s liquidation to Citadel underscores the risks of excessive leverage amid market downturns, marking one of the most dramatic failures in the current AI investment boom.