The Moments Rp534 Trillion in Managed Funds Vanished from the Stock Market
Jakarta, CNBC Indonesia - The name Leopold Aschenbrenner was once the talk of Wall Street as a ‘prophet’ of artificial intelligence (AI) investment. But at the end of July, the founder of hedge fund Situational Awareness became the target of lenders after his massive portfolio nearly collapsed in a matter of days.
The story began with a taxi ride to LaGuardia Airport. David Mann, CEO of the family firm Mannsion Group, received an urgent phone call from someone close to Aschenbrenner offering to sell a portion of Situational’s Anthropic shares. The deal, the caller said, had to be completed overnight. ‘Aschenbrenner is forced to sell. He needs money,’ Mann told the Wall Street Journal.
Aschenbrenner, a 25-year-old former OpenAI employee, rose to prominence thanks to a 165-page essay titled ‘Situational Awareness: The Decade Ahead’ in 2024 that predicted the direction of AI development. On the back of that reputation, his assets under management soared from around US$1.5 billion last summer to more than US45billionbyearlyJuly2026(atanexchangerateofaroundRp17, 800/US, equivalent to more than Rp801 trillion).
His strategy was aggressive: take large long positions in AI ‘winner’ stocks such as chipmakers, while shorting software stocks deemed likely to be disrupted by AI. To amplify its bets, Situational used leverage of up to US$3 for every US$1 of its own capital, plus custom derivative instruments called ‘flex options’. Goldman Sachs, JPMorgan, Bank of America, and Citigroup provided financing, although Jefferies and Barclays declined to become partners because the portfolio was considered too concentrated and heavily leveraged.
Problems emerged in mid-July, when a cheap open-source AI model from China reversed market sentiment. Situational’s core holdings such as Bloom Energy, Sandisk, and Nebius tumbled, while the stocks it had shorted such as Adobe, AppLovin, and Figma rallied—compounding losses from both sides simultaneously.
On 24 July, Situational sent a report to investors acknowledging losses in July but calling it ‘the right time’ to add funds. The claim did little to quell panic; clients flooded the office with phone calls seeking updates. A week later, the fund’s target stocks plunged 9-24%, and it became an open secret on Wall Street that a large fund was ‘degrossing’—forced selling to reduce risk and leverage.
On Wednesday, 29 July, Aschenbrenner’s team scrambled to raise cash. They approached Sequoia, Greenoaks, Michael Dell’s family office (DFO Management), and XN to sell a portion of Anthropic shares worth US$5 billion at a 20% discount with a deadline of just 12 hours. Greenoaks worked overnight to prepare the transaction, scheduled to close at 8 a.m. the following morning, complete with Anthropic’s blessing.
But quietly, Situational was also running parallel negotiations with Citadel and Millennium Management to sell the majority of its liquid stock portfolio. Ken Griffin, Citadel’s boss, personally intervened from London. When Citadel ultimately won the deal at a discount of around 10% from market price in the early hours of 30 July, Aschenbrenner unilaterally cancelled the planned sale of Anthropic shares—infuriating several prospective investors.
Situational and Citadel only finished signing documents at around 9:10 a.m., just 20 minutes before the US stock market opened. Situational then announced the bad news to its investors: the fund lost around 67% in July, equivalent to about US$30 billion (Rp534 trillion), although it was still up 80% year-to-date. Jane Street, one of Situational’s investors, also suffered losses of around US$15 billion from the turmoil.
Amid the financial storm, that same weekend Aschenbrenner proceeded with his wedding to Avital Balwit, chief of staff to Anthropic CEO Dario Amodei, in a beachside ceremony in Carmel, California. During one of the wedding toasts, there was a half-joking remark thanking Ken Griffin and Citadel ‘for making this day possible’.
Now, Situational’s assets under management stand at around US$15 billion (±Rp267 trillion), a sharp decline from its peak. Aschenbrenner and his team are meeting clients one by one to explain the causes of the losses while conducting a thorough evaluation of their risk management going forward. Slowly, the fund is beginning to rebuild its portfolio, including injecting US$400 million into startup Source Foundry and buying shares in SharonAI.
The Situational Awareness case serves as another reminder to the market of the dangers of excessive leverage in the hedge fund industry, several years after the collapse of Archegos Capital shook Wall Street. The difference this time is that the fund manager did not go under—and even managed to celebrate a wedding amid the greatest turmoil of his career.