A high-flying hedge fund founded by former OpenAI researcher Leopold Aschenbrenner dumped its stock holdings to Citadel, an AI-age sequel to the Archegos fiasco that rocked Wall Street a few years ago.
Situational Awareness sold its public book to Ken Griffin’s hedge fund, people familiar with the matter said. The trade came after it suffered losses on some big stock positions recently hit by AI jitters, and banks that had lent to the fund against its holdings put pressure on it, one of the people said. WSJ previously reported Citadel’s purchase.
The fast-moving situation mirrors the 2021 unraveling of Archegos, Bill Hwang’s investment firm brought down by its concentrated, debt-fueled stock bets. Slow-moving lenders were left holding the bag — the episode started the clock on Credit Suisse’s downfall — and prompted some banks to tighten their risk limits around such trades.