Goldman Sachs has earned more than $200mn in fees this year from lending to AI hedge fund Situational Awareness, making it the biggest client in Goldman's prime brokerage business. The fund, founded by former OpenAI researcher Leopold Aschenbrenner in 2024, grew rapidly through lucrative AI bets but suffered tens of billions in losses after a sell-off in AI stocks. \n\nIt is unusual for a two-year-old fund like Situational Awareness to become such a large client of Goldman alongside established hedge funds like Citadel and Millennium. The fees were driven by the fund's rapid growth and the types of trades Aschenbrenner made.

However, after the losses, Aschenbrenner told investors in July he would stop borrowing to magnify bets, meaning future fees for Goldman will not be as large. \n\nGoldman and Situational Awareness declined to comment. Aschenbrenner sold most of the fund's public-market positions, once estimated at $16bn, to Citadel. JPMorgan Chase cut off lending after the losses, but Situational Awareness remains a Goldman client.

Aschenbrenner has also started a trading relationship with tech-focused brokerage Clear Street. \n\nDespite the setbacks, Aschenbrenner said he would "fight another day" and began taking new positions in technology stocks earlier this month. He rose to prominence in 2024 with a 165-page essay predicting AI's societal impact, earning him the nickname "Nostradamus of AI" and helping him raise start-up capital.