AI-focused hedge fund loses two-thirds of its value after steep drops in chip stocks

Leopold Aschenbrenner's Situational Awareness hedge fund experienced a dramatic reduction in value after its large positions in SanDisk and Micron Technology fell sharply in July. The fund held stakes of $5.7 billion in SanDisk and $5.6 billion in Micron at the end of June, together representing more than half of its U.S. equity exposure.

SanDisk shares dropped 47% and Micron fell 29% during the month, erasing about 67% of the fund's portfolio value and triggering margin calls. To meet those calls, the fund sold billions of dollars of assets to Citadel, the investment firm led by Ken Griffin.

Bloom Energy, the fund's next-largest holding, also declined 31%, while positions in TSMC and a new $1.2 billion stake in Nebius suffered losses as the broader AI-related trade weakened. As a result, the fund's assets under management fell from roughly $45 billion to around $10 billion, although it remained up for the year after reporting a 439% gain in the first half of 2026.

The losses are reported to have impacted Jane Street, a Wall Street trading firm, by about $15 billion. Aschenbrenner, a 24-year-old AI investor who previously worked at FTX and OpenAI, launched the fund in 2024 and has been noted for his predictions about artificial general intelligence.