Situational Awareness, the AI-focused hedge fund founded by former OpenAI researcher Leopold Aschenbrenner, is seeking additional capital from investors following sharp losses during the recent correction in technology and AI-related stocks, according to a report by the Financial Times.
The report cites unnamed people familiar with the matter as revealing that the approximately $20bn hedge fund has been holding discussions with existing investors and lending counterparties in recent days about raising new capital. The firm has also explored selling selected portfolio assets to investors, although one source described the conversations as opportunistic rather than part of a formal fundraising process.
The move follows a turbulent period for the fund, which had generated exceptional gains during the first half of 2026 as AI-linked equities rallied strongly. However, the subsequent market downturn has significantly reduced those gains, with leveraged positions amplifying the impact of the sell-off.
In a recent investor letter, Aschenbrenner acknowledged that the portfolio had been affected by recent market volatility, particularly across Asian technology stocks, but argued that the correction had created some of the most compelling investment opportunities seen since early 2025. The letter also invited investors to commit additional capital from 1 August.
Despite the recent decline, Situational Awareness reportedly remained up 439% on a net basis through the end of June, highlighting the extraordinary returns generated during the AI-driven market rally.
Aschenbrenner told investors that several potential industry catalysts, including a widely anticipated initial public offering by AI company Anthropic, could support a recovery in AI-related equities during the second half of the year.
The hedge fund was launched in 2024 after Aschenbrenner left OpenAI and published his widely read essay Situational Awareness, which argued that artificial intelligence would reshape the global economy far more rapidly than many investors expected.
The firm has attracted backing from several prominent technology investors, including Stripe co-founders Patrick and John Collison, former GitHub chief executive Nat Friedman, investor Daniel Gross and proprietary trading firm Jane Street.
Regulatory filings indicate the fund operates with a relatively small investment team, employing just four investment professionals despite managing billions of dollars in assets. It has also relied on leverage provided by several major Wall Street prime brokers to increase exposure to AI-related investments.
Many of the fund’s largest disclosed holdings have come under pressure during the recent technology sell-off. Stocks including Oracle and AMD have fallen sharply in recent weeks, while several smaller AI infrastructure and cloud computing companies held by the fund—including Nebius, Sharon AI, Bloom Energy and memory-related businesses—have recorded even steeper declines.
