Leopold Aschenbrenner's San Francisco AI fund returned a reported 439% and then sold its entire public equity portfolio to Ken Griffin's Citadel in a single block trade after margin calls from three prime brokers. The fund wasn't wrong about AI — it was levered four to one.

Before the market opened on Wednesday, July 30, one of the best-performing hedge funds in the world sold everything it held in public stocks — longs and shorts together — in a single negotiated block trade. The seller was Situational Awareness LP, the San Francisco AI fund run by former OpenAI researcher Leopold Aschenbrenner. The buyer, first reported by CNBC's David Faber and confirmed by the Wall Street Journal and Business Insider, was Citadel — Ken Griffin's roughly $71 billion hedge fund. Not Citadel Securities, the separate market-making firm; Griffin's multistrategy fund.

It was a forced sale. The fund was facing margin calls on leveraged AI positions that had cratered in July, and its three prime brokers — Goldman Sachs, JPMorgan, and Bank of America — were marketing its holdings out of both sides of the book, according to SpotGamma's reconstruction of the unwind.

Here is the part the "AI bubble popped" takes get wrong: the thesis wasn't the problem. The leverage was. Aschenbrenner's fund launched in late 2024 with roughly $225 million and rode a bet on the physical layer of AI — storage, power, GPU clouds, miners converting to data centers — to a net return reported at 439% through June 30, per an investor letter reviewed by the Financial Times. The catch was gross leverage running as high as four times, per SpotGamma and CNBC. At 4x, a 30% drop in the long book is a roughly 120% hit to equity. July's AI-infrastructure selloff sent core holdings down 27% to 54% in a month. The math did the rest.

The reported figures do not agree, and they shouldn't be smoothed over. Peak assets have been put at $20 billion (Business Insider, FT, WSJ), $24 billion (Faber), and as high as $45 billion (FinanceFeeds); the return has been reported at 439% and, in TechTimes' headline, "1,000%." Aschenbrenner's age appears as 24 in some accounts and 25 in Business Insider's. What is consistently sourced: the single-block sale to Citadel, the three-broker margin calls, and the ~4x leverage.

The fund kept its crown jewel. Situational Awareness did not sell its private portfolio, which includes a stake in Anthropic, Business Insider reported; Millennium and existing backer Jane Street both bid on the public book and lost. The original backers read as a roster of the Bay Area AI establishment — Stripe's Patrick and John Collison, Nat Friedman, and Daniel Gross — funding a 24-year-old essayist with, by his own account, no professional investing experience before he raised the fund.

What's unconfirmed: the block's price (distressed buyers do not pay mid-market, and no figure has been disclosed), the true gross exposure that lived off the 13F in swaps and options, and whether Aschenbrenner's plan to raise fresh capital from August 1 finds takers. The thesis may yet be right. The cap table just got a lot smaller.