Situational Awareness is down 67% in July after heavy losses on AI stocks, a letter from the hedge‑fund firm to investors revealed.

The letter, written by Leopold Aschenbrenner, bluntly admitted, “We let you down this month,” and explained that the firm sold the bulk of its stock holdings to Citadel in a rush to raise cash to meet margin calls.

Despite July’s slide, the fund remains up about 80% for the year, the letter said, and has now removed all leverage from its portfolio. The firm still holds a portfolio of private‑company investments, including Anthropic.

Aschenbrenner blamed short sellers for amplifying the losses and compared the situation to a bank run, underscoring the urgency of the firm’s actions to protect investors.