**Leopold Aschenbrenner’s AI-focused hedge fund Situational Awareness faced steep losses in July 2026 from leveraged long positions in semiconductors, data centers, and infrastructure names amid a broad AI stock rout, triggering margin calls from prime brokers and forcing a discounted sale of its roughly $16 billion public-equity book to Citadel.** The transaction slashed assets from peaks near $45 billion to about $10 billion while preserving private holdings such as the large Anthropic stake. In investor letters, Aschenbrenner accepted responsibility, eliminated all leverage, and committed to continuing operations as a hybrid public-private vehicle. Since then, the fund has deployed fresh capital—including a reported $400 million investment in a chip startup—and Citadel has unwound over 80% of the acquired risk through block trades. Trader consensus reflects these steps toward stabilization, with no confirmed wind-down signals or resolution timelines through late 2026.