Citadel purchases distressed AI hedge fund Situational Awareness's equity portfolio at discount

Citadel agreed to buy a sizeable public equity portfolio from the AI‑focused hedge fund Situational Awareness at an estimated 10% discount after the fund faced margin calls amid a sharp sell‑off in AI infrastructure stocks. The transaction let Situational Awareness retain its private stake in AI company Anthropic, valued at roughly $5 billion, while giving Citadel discounted exposure to AI‑related equities such as CoreWeave and Bloom Energy, which rallied after the deal was announced.

The fund, founded by former OpenAI researcher Leopold Aschenbrenner, saw its assets plunge from about $45 billion at the start of July to around $10 billion following the sale, a loss of roughly 67% in the month. Citadel’s move follows a long‑standing “crisis capital” strategy of acquiring distressed positions, talent, or portfolios during periods of market stress, a playbook it has used in past events such as the Amaranth Advisors collapse and the Sowood Capital acquisition.