Situational Awareness, a hedge fund led by former OpenAI researcher Leopold Aschenbrenner, invested $400 million in Source Foundry, a chip startup, bringing its total stake to $500 million.
This bet on chip manufacturing comes after the fund sold most of its public portfolio to Citadel in late July and saw its assets under management fall from $20 billion to $10 billion amid losses in AI infrastructure stocks.
What happened
Situational Awareness, an AI-focused hedge fund founded by former OpenAI researcher Leopold Aschenbrenner, invested $400 million in Source Foundry this week, bringing its total investment in the chip startup to $500 million.
Why it matters
The move signals that despite the fund's recent struggles—it sold off the majority of its public portfolio to Citadel in late July and saw assets under management drop from $20 billion to $10 billion—Aschenbrenner remains committed to major bets on AI infrastructure, particularly chip manufacturing startups founded by Stanford researchers.
What to watch
The fund's private investments in companies like Source Foundry and its retained stake in Anthropic may shape whether it can recover from losses in AI infrastructure stocks that have pressured its public portfolio.
Situational Awareness, the AI-focused hedge fund launched in 2024 by Leopold Aschenbrenner, a former OpenAI researcher in his mid-twenties, has made headlines both for early strength and recent turbulence. Aschenbrenner founded the fund despite having no trading experience at the time. Early returns proved strong, but the fund has faced steep losses in recent months as AI infrastructure stocks have declined sharply.
This week, according to The Wall Street Journal, Situational Awareness invested $400 million into Source Foundry, a startup founded by Stanford researchers focused on making chip manufacturing faster and cheaper. That injection brings the fund's total investment in Source Foundry to $500 million, underscoring its commitment to the chip manufacturing space.
The move comes just weeks after a major portfolio restructuring. At the end of July, facing mounting pressure from losses in AI infrastructure stocks, Situational Awareness sold off the majority of its public portfolio to Ken Griffin's Citadel. The fund did retain its shares in Anthropic, signaling a selective approach to which positions to keep. The liquidation had a stark impact: the fund's assets under management fell from $20 billion to $10 billion. Despite these setbacks, Aschenbrenner has continued to make ambitious bets on AI infrastructure through private investments.
Situational Awareness, founded in 2024 by Leopold Aschenbrenner—a former OpenAI researcher in his mid-twenties with no prior trading experience—has experienced a dramatic swing in fortune. Early returns were reportedly strong, but the fund faced steep losses in recent months driven by the decline in AI infrastructure stocks. In late July, the fund responded by liquidating most of its public holdings to Citadel, a move that halved its assets under management from $20 billion to $10 billion. Yet rather than retreating entirely, Aschenbrenner has doubled down on what appears to be his core conviction: that AI infrastructure, particularly chip manufacturing, remains a critical area for investment. The $400 million injection into Source Foundry this week—raising the fund's total stake in the startup to $500 million—indicates that Aschenbrenner is willing to pivot capital away from public equities toward private bets on chip startups. This mirrors a strategic shift seen in other investors navigating volatility in AI infrastructure stocks.
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