Leopold Aschenbrenner's Situational Awareness hedge fund significantly increased its holdings in several artificial intelligence stocks before they experienced a sharp decline in July.
According to a recent 13F filing, the fund's largest positions included Sandisk, Micron Technology, Bloom Energy, Taiwan Semiconductor Manufacturing, and Nebius Group, all of which suffered substantial losses in July—Sandisk dropped nearly 47%, while Micron fell about 29%.
The fund's aggressive strategy focused on companies supplying infrastructure for the AI boom, but the abrupt market reversal resulted in a liquidity crisis. By the end of July, the fund's assets plummeted from approximately $45 billion to around $10 billion after it was forced to sell off its holdings, including CoreWeave, to Citadel at a discount.
This situation highlights the risks associated with concentrated investments in volatile sectors like AI, especially when leveraging is involved