Citadel’s $5.5bn rescue of Aschenbrenner’s AI fund exposes bitcoin miner leverage
Citadel absorbed billions in AI equities from a collapsing hedge fund, with roughly $1bn tied to bitcoin mining stocks caught in the unwind.
Ken Griffin’s Citadel has absorbed a multi-billion-dollar equity portfolio from Situational Awareness LP, the AI-focused hedge fund run by former OpenAI researcher Leopold Aschenbrenner, after margin pressure forced a rapid deleveraging. The transaction, completed on 30 July, transferred roughly $5.5bn in public equity positions, according to Crypto Briefing, with the Wall Street Journal describing the purchase as covering “the bulk” of the fund’s stock portfolio, as reported by Protos.
Buried inside the transferred book was approximately $1bn in bitcoin mining stocks, a detail that ties the AI industry’s leverage unwind directly to crypto-adjacent equities. Firms such as CoreWeave began life as cryptocurrency mining operations before pivoting to AI cloud infrastructure, and now share power, GPU and data-centre supply constraints with the wider bitcoin mining sector that PoundToken has tracked closely this year.
From 439% returns to forced selling
Situational Awareness, launched in late 2024, had reported a net return of 439% between 1 January and 30 June 2026, according to a 24 July investor letter cited by the Financial Times. Peak assets under management were estimated between $20bn and $45bn across the two reports, built on concentrated, leveraged bets on AI infrastructure names including Broadcom, Intel, CoreWeave, SK Hynix, Sandisk and Nebius Group.
That leverage worked in reverse once the sector turned. CNBC reported the fund had suffered “heavy losses” and was consulting investment bankers over a possible orderly wind-down. Several of its holdings, including Sandisk, Nebius Group and SharonAI Holdings, lost at least 30% during July alone, while SK Hynix’s US-listed ADRs closed roughly 15% below their offering price.
Citadel steps in as buyer of last resort
Citadel, which manages approximately $71bn in total assets, took on the public equity slice rather than let it hit the open market, a move that market participants say likely prevented a sharper sell-off across AI and mining-linked equities. Situational Awareness retained around $10bn in remaining assets, including its private stake in Anthropic, which had grown to represent roughly a fifth of the fund’s holdings before the sale. Only public positions changed hands, leaving the private side of the fund’s AI exposure untested by the transaction.
Aschenbrenner’s most recent SEC 13F filing, disclosing US equity holdings as of 31 March 2026, listed 42 positions worth $13.7bn. The next 13F, due in mid-August, is expected to reveal the precise scale of the July drawdown.
A familiar playbook, a different asset class
Aschenbrenner previously worked on Sam Bankman-Fried’s FTX Future Fund, resigning the day before FTX’s bankruptcy filing in November 2022. He later joined OpenAI’s Superalignment team, was dismissed in April 2024 over a disputed data leak, and turned the episode into a widely read manifesto before launching Situational Awareness. Reflecting on the FTX collapse, he told the Dwarkesh Podcast: “We were a tiny team, and then from one day to the next, it was all gone and associated with a giant fraud.”
For crypto-adjacent markets, the episode underscores how tightly bitcoin mining equities have become entangled with AI infrastructure valuations, and how leveraged unwinds in one sector can now transmit directly into the other. With Citadel’s acquisition absorbing the immediate shock, attention will turn to whether the mid-August 13F filing exposes further stress in the remaining AI and mining positions still held privately.
Read more: $16bn AI fund unwind exposes leverage risk at bitcoin miners turned data-centre plays
