AI hedge fund Situational Awareness is returning to options markets after its near-collapse

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The fund, which lost roughly $35 billion in assets after a forced sale this summer, has been active in options markets late last week and early this week

Credit: Leopold Aschenbrenner / LinkedIn

Leopold Aschenbrenner's hedge fund, Situational Awareness, has been buying options positions in Advanced Micro Devices, Bloom Energy, and CoreWeave, among other stocks, according to CNBC. The trading activity occurred in the days spanning late last week through early this week.

The fund also took options positions in SK Hynix and SanDisk, according to CNBC. Additionally, Situational Awareness bought options in the Roundhill Memory ETF, which trades under the ticker DRAM. Whether the fund is drawing on assets that survived the summer's turmoil or has attracted fresh investor capital remains unknown.

The reentry to public markets follows a summer in which Situational Awareness came close to failing. The fund had grown to roughly $45 billion at the start of July before heavy losses in AI-related stocks, which the fund held using high leverage, triggered margin calls from prime brokers. That forced a distressed sale of the fund's publicly traded holdings to Ken Griffin's Citadel, leaving Situational Awareness with around $10 billion in assets.

The fund's 13F filing showed that Sandisk and Micron $MU -0.22% Technology together accounted for more than 56% of its disclosed U.S. holdings at the end of June. Sandisk stock fell nearly 47% in July and Micron stock dropped roughly 29%. Bloom Energy slid 32% that month, while CoreWeave and other AI infrastructure names also declined. The fund had used as much as 400% leverage and, from its launch in July 2024 through the end of June, had posted returns exceeding 1,000%.

Citadel subsequently unwound more than 80% of the risk it took on from the Situational Awareness portfolio, executing more than 100 block trades representing over $4 billion in market value. Situational Awareness retained a stake in Anthropic and, in the weeks following the near-collapse, Leopold Aschenbrenner made a $400 million investment in an undisclosed private company.

The Securities and Exchange Commission has also sent subpoenas to major Wall Street banks — Goldman Sachs $GS +0.92%, JPMorgan $JPM +0.76% Chase, Citigroup $C +0.23%, and Bank of America $BAC +0.21% — seeking information about their dealings with Situational Awareness. The fund has not been accused of any wrongdoing. "We are a highly regulated business and will cooperate to the fullest extent with any regulatory request," a Situational Awareness spokesman said in a statement.

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