Leopold Aschenbrenner’s Situational Awareness Faces Turbulence in AI Bet

• by Shimanta Das
• July 31, 2026

Leopold Aschenbrenner, the former OpenAI researcher turned hedge fund manager, is facing a critical test as his fund Situational Awareness experiences significant losses. According to sources, the fund’s portfolio of AI infrastructure investments, including a major position in SK Hynix, has declined sharply, while short positions in software companies like Adobe have moved against it. The situation remains fluid, but the turmoil marks an early and potentially decisive challenge to the investment thesis that made Aschenbrenner one of the most closely watched figures in the AI trade.

Despite the recent setbacks, Situational Awareness managed $13.67 billion as of March 31, representing a 148% growth from the end of 2025. The fund, run by Aschenbrenner—who previously worked on OpenAI’s ‘Superalignment’ team—has attracted attention for its concentrated bets on AI infrastructure. However, the recent losses highlight the volatility of such a strategy, especially as the broader market shifts. Data from Insider Monkey’s Q4 2025 database of 1,041 elite hedge funds shows that sentiment around Aschenbrenner’s holdings is mixed, with some stocks under pressure.

In a related development, Nebius shares jumped after news that Situational Awareness bought a stake in the company. This move underscores Aschenbrenner’s continued focus on AI-related plays, even as his core holdings face headwinds. Meanwhile, the broader AI infrastructure landscape shows signs of strain: management at key suppliers confirmed that HAMR-based exabyte output is on track to constitute the majority of data center shipments by end of 2026, but average HDD prices have spiked dramatically, prompting major cloud providers to sign long-term 5-year supply contracts. Production capacity for high-capacity nearline drives at WDC is essentially sold out through the remainder of the year, indicating strong demand but also supply constraints.

The coming weeks will be crucial for Aschenbrenner as he navigates these challenges. The fund’s performance will serve as a barometer