Citadel offloads 80% of Situational Awareness risk

Citadel has offloaded more than 80% of the risk inherited from Leopold Aschenbrenner’s AI-focused Situational Awareness portfolio. The reduction follows a period of significant market dislocation that saw the Situational Awareness fund lose 67% of its value in July.

Citadel executed nearly 100 block trades totaling more than $4 billion to distribute the acquired risk. The firm’s move comes after it stepped in to acquire the majority of the Situational Awareness stock positions as the fund faced severe pressure during a sharp reversal in technology shares. Ken Griffin noted that the firm aimed to be “front-footed and proactive during periods of market dislocation.”

The Situational Awareness portfolio, which held approximately $20.24 billion across 26 positions as of June 30, had significant exposure to semiconductor and Bitcoin mining stocks. While the fund’s interest in miners was linked to their energy infrastructure for AI data centers, the lack of downside protection in chip stocks during the July decline contributed to the fund's liquidation. Major mining positions included Core Scientific, Riot Platforms, IREN, and CleanSpark.