Jane Street, the secretive US trading firm, posted a roughly $15bn loss in July, ending a decade-long streak of monthly profits. The loss coincided with a sharp decline in AI stocks that hit hedge funds like Situational Awareness, which counted Jane Street among its investors. Earlier in July, the firm shifted its roughly $11bn public debt pile to private investors, limiting financial disclosures. The FT reports this marks a stunning reversal for a firm whose returns were the envy of Wall Street and highlights its evolution from a nimble market maker into one of the largest US financial institutions taking massive, longer-horizon bets.

S&P Global analyst Robert Hoban warned the firm must avoid "any sort of 'oopsies'" as it manages new risks. Past issues include a ban by the Securities and Exchange Board of India for an alleged "sinister scheme" to manipulate markets, which Jane Street called "untenable" and "flawed." Co-founder Rob Granieri also faced scrutiny for unknowingly financing a militia plotting a coup in South Sudan and backing Leopold Aschenbrenner's Situational Awareness fund.

Despite the July loss, Jane Street remains up over $40bn for the year. The firm says it will be more "selective" about risk while focusing on "short time horizon strategies," has increased loss-absorption buffers, and is managing prime broker relationships more proactively. Observers suggest its risk-taking culture must adapt to its scale.