Hedge fund manager Leopold Aschenbrenner vowed to "fight another day" after his fund Situational Awareness plunged 67% in July. In a letter to investors, he took "full responsibility" and said he would make it his "mission to ensure that we learn the necessary lessons."

Founded in 2024, the San Francisco-based fund saw assets balloon to more than $20bn on aggressive AI bets. Aschenbrenner, a former OpenAI and FTX Future Fund employee under Sam Bankman-Fried, compared the dynamics to a "bank run" and cited "adverse trading in names publicly associated with us." Holdings including Bloom Energy and Sandisk tumbled.

The fund executed an emergency exit with Ken Griffin's Citadel, selling the majority of public equity holdings at a discount. Despite July's losses, the fund remains up 80% on the year. Aschenbrenner said Situational Awareness would continue operating but would no longer borrow from banks to magnify bets.

"These were very expensive scars, but I am dedicated to ensuring they will be invaluable lessons," Aschenbrenner wrote. The fund concentrated bets on few AI stocks using leverage from prime brokers. Many early investors face lock-up agreements until at least September.