Citadel has sold over 80% of the portfolio it acquired from Situational Awareness, the AI-focused hedge fund that nearly collapsed during July's tech sell-off. The firm completed nearly 100 block trades worth more than $4 billion in recent weeks to offload the positions, according to a letter to investors seen by the Financial Times. The rapid exit suggests Citadel profited as tech stocks recovered, since Ken Griffin's firm purchased the book at a roughly 10% discount at the end of July. The deal, orchestrated in just 24 hours, marked one of Wall Street's largest rescue operations. Situational Awareness, run by 24-year-old Leopold Aschenbrenner, had grown to over $20 billion in assets despite his lack of traditional finance experience. As the tech sector faced volatility, Aschenbrenner attempted to raise funds through asset sales before selling his stock holdings to Citadel. The transaction stabilized market fears of forced selling and boosted tech share prices. Citadel's exit included some of the year's largest block trades. The firm did not disclose the portfolio's value or purchase price. Unlike past hedge fund rescues, Situational Awareness survived, retaining its private stakes including Anthropic and a small public equity book. Aschenbrenner reported the firm remained up 80% for the year despite the turbulence.

Griffin's rare investor letter highlighted Citadel's proactive approach during market dislocation, noting the firm's flagship fund rose 6% in July while rivals struggled. The successful turnaround demonstrated Citadel's ability to execute large-scale solutions quickly.

The episode underscored the volatility facing AI-focused investments and highlighted Citadel's role as a market stabilizer during crisis periods.