For nearly two years the AI trade ran one way. Buy the companies that supply the buildout, the chipmakers, memory manufacturers, data center operators and power suppliers, and the price went up. This month it broke. The Nasdaq 100 slid into a technical correction this week, meaning a fall of at least 10% from its peak, as the selloff in semiconductor stocks deepened. The index sits 11.3% below its high from early last month, and investors have started asking when the hundreds of billions of dollars committed to AI infrastructure this year turn into profit.
The most visible casualty so far is not a chip company. It is a fund. Situational Awareness, which manages about $20bn and was up 439% after fees through the end of June, has approached existing investors and lenders for fresh money after heavy losses in the rout, the Financial Times reported on Thursday. Some investors were also offered the chance to buy assets out of the portfolio. One person briefed on the talks called them ad hoc rather than coordinated.
That matters beyond one manager's balance sheet. Situational Awareness was the purest available expression of the AI trade: concentrated, leveraged and public about its convictions. Its founder, Leopold Aschenbrenner, is 25, left OpenAI in 2024, had no professional trading experience, and runs the fund with eight employees, four of whom are investment professionals. It has grown to more than $20bn in assets since launching with a few hundred million, backed by Stripe's Patrick and John Collison, Nat Friedman, Daniel Gross and the trading firm Jane Street.
What the July 24 letter says
In a letter to investors dated July 24, presenting half-year results, Aschenbrenner wrote that the fund had "not been immune" to the market swings, particularly in Asia.
Until that line, the public record was a straight climb: the 439% first half, on top of gains of more than 1,000% since launch. The new fact is that the same portfolio, built with borrowed money, is running in reverse, and that the manager who spent two years telling people to buy is now asking them for capital. For anyone holding AI infrastructure stocks, that is the difference between a drawdown and a forced unwind, because leveraged funds that need cash tend to sell what they can rather than what they want to.
The letter argued the tech selloff had produced the most attractive opportunities since early 2025, and offered investors the ability to add cash on August 1. A postscript noted that the firm occasionally flags particularly good moments to put money in. Aschenbrenner also pointed to expected AI developments in the second half of the year, including an Anthropic initial public offering, as a possible catalyst. Anthropic submitted confidential IPO paperwork to the SEC on June 1 and has not set a date, price or share count.
The positions that turned
Oracle and AMD, among the fund's largest disclosed holdings, are each down about 20% this month. Smaller names fell harder. Nebius, an AI cloud provider in which the fund disclosed a multibillion-dollar stake in May, is down 48% from its June peak, erasing roughly $35bn of market value. Sandisk has lost 56% in just over a month. Sharon AI has fallen by a similar margin since mid-June.
The Asian exposure was the acute problem. Situational Awareness was a cornerstone investor in SK Hynix's record Nasdaq listing on July 10, taking part in a $5bn anchor allocation at $149 per receipt. Those shares closed Wednesday in New York at $126.79, about 15% below the issue price, and South Korea's Kospi has lost roughly a third of its value.
What has not been disclosed
The size of the fund's losses is not public. Neither is how much it borrowed, though the FT reported it counted several major Wall Street banks as prime brokers, the firms that lend to hedge funds against their positions. Situational Awareness did not respond to requests for comment.
The holdings above come from a regulatory filing made in late March, which covers only US-listed stock positions and is now four months old. The fund's single largest bet, a stake in Anthropic reported to be about a fifth of the portfolio, is private and does not reprice daily, which means the published damage and the real damage are not the same number.
Seeking capital is also not the same as facing redemptions. Funds raise money in drawdowns to buy, and Aschenbrenner is explicitly framing it that way. The test is whether investors who have watched a 439% gain turn into losses in four weeks read the August 1 window as an opportunity or an exit. That window opens Saturday.