Leopold Aschenbrenner's $20 billion hedge fund may be in trouble.

Aschenbrenner joined OpenAI's superalignment team in 2023.

OpenAI fired him in 2024, citing alleged information leaks, while he claims it was actually because he raised safety concerns.

A few weeks later, he published a 165-page paper titled 'Situational Awareness: The Next Decade'.

The paper argues that AGI will arrive before 2027, and the world is not yet prepared.

The paper quickly went viral in Silicon Valley and Wall Street, making him one of the most watched young investors today.

Subsequently, in September 2024, he launched Situational Awareness LP with only $225 million.

Supporters include Stripe's Collison brothers and former GitHub CEO Nat Friedman.

Within two years, the fund's assets grew to approximately $20 billion. By June, its year-to-date gain reached 439%.

Then, the AI stock sell-off hit.

The fund's value plummeted sharply in recent weeks.

Both Oracle and AMD fell by about 20% in July. Smaller holdings like Nebius, Bloom Energy, and SanDisk saw even larger declines.

Here is why this might be serious.

The fund is now offering some investors the option to buy assets directly from its portfolio, rather than just accepting fresh capital.

Typically, a healthy fund simply absorbs new money and buys more existing positions.

Directly offering existing positions usually means the fund wants liquidity without dumping shares into the open market. Selling in an already declining market would further depress prices and lock in larger losses.