A 24-year-old former OpenAI researcher just became Wall Street’s most expensive cautionary tale. Leopold Aschenbrenner’s Situational Awareness LP hedge fund sold its entire public equity portfolio, roughly $16 billion worth of AI stocks, to Citadel in a single block trade this month after its leveraged bets cratered.

From moonshot to meltdown

Situational Awareness launched in late 2024 with approximately $225 million in initial capital. By the end of June 2026, the fund had posted net returns of roughly 439% year-to-date, ballooning its assets under management north of $20 billion.

The fund was running leverage of nearly four times its equity base. Key AI positions in the portfolio fell 40-50% during the recent period before the unwind.

The portfolio included AI infrastructure plays: Bloom Energy, Nebius (formerly SanDisk), CoreWeave, IREN, and Core Scientific. The book also included Bitcoin miners who had pivoted to data center operations: Riot, CleanSpark, HIVE, and Bitdeer.

Why Wall Street thinks this is the bottom

Forced liquidations from leveraged funds create artificial selling pressure that pushes prices below their fundamental value. Citadel buying the whole portfolio in one block is significant. Ken Griffin’s firm presumably got a meaningful discount to market prices, which means they’re betting these names recover.

The crypto crossover and what investors should watch

Several of the fund’s holdings were Bitcoin mining companies that had repositioned themselves as AI and high-performance computing infrastructure providers. Riot, CleanSpark, HIVE, and Bitdeer have all made strategic moves to capture AI-related revenue streams alongside their mining operations.

Aschenbrenner previously worked at OpenAI and the FTX Future Fund. The fund itself was named after his 2024 essay predicting the arrival of superintelligent AI by 2027, a timeline that shaped his aggressively bullish positioning.

For investors considering whether this is genuinely a bottom, watch whether Citadel begins unwinding its newly acquired positions or holds them. Monitor the leverage levels across other AI-focused funds, as Situational Awareness may not be the only vehicle running four-times leverage on concentrated AI bets. Track the operating fundamentals of the dual-use miners: if Riot, Bitdeer, and their peers continue signing AI hosting contracts and growing non-mining revenue, the forced-selling discount on their shares could represent genuine value.