Citadel, Ken Griffin’s flagship hedge fund, just bought roughly $16 billion worth of public equities from Leopold Aschenbrenner’s Situational Awareness fund at a discount exceeding 10% to market value. The deal closed late on July 30 and into July 31, involving multiple prime brokers in what amounts to one of the largest forced portfolio liquidations in recent memory.
For anyone keeping score at home, Aschenbrenner’s fund peaked at $45 billion in assets under management earlier in July. Weeks later, margin calls turned that number into a cautionary tale.
From $100 million to $45 billion to fire sale
Leopold Aschenbrenner launched Situational Awareness in 2024 with $100 million in initial capital, betting aggressively on AI technologies and the infrastructure buildout supporting them. The fund’s AUM ballooned to $45 billion by early July 2026.
Infrastructure sector bets went sideways, with sharp declines in holdings like SK Hynix dragging the portfolio lower. The fund had also placed short bets on software stocks that moved against it. The margin calls forced a liquidation of the leveraged portion of the portfolio. Client-capital-funded positions reportedly remained intact. Citadel swooped in as the buyer, picking up the distressed assets at a meaningful discount.
The crypto connection is bigger than you think
Situational Awareness held multi-billion-dollar equity stakes in several Bitcoin mining companies, including Core Scientific, IREN, and Riot Platforms. The fund’s portfolio reflected a thesis that AI infrastructure and Bitcoin mining infrastructure are converging: data centers that mine Bitcoin can also train AI models, with overlapping power contracts, cooling systems, and GPU expertise.
Some of the assets acquired by Citadel already rebounded significantly the next trading day. Griffin’s firm Citadel Securities has previously moved into digital asset trading, and having billions in Bitcoin miner equity land on its books through this acquisition represents real exposure to crypto markets regardless of original intent.
What this means for investors
The forced liquidation of multi-billion-dollar positions in Bitcoin miners like Core Scientific and Riot Platforms could have created temporary dislocations in those stocks. If Citadel decides to trim or exit these positions over the coming weeks, selling pressure on Bitcoin mining equities could weigh on the sector.
Aschenbrenner, a former OpenAI researcher, grew the fund 450x in roughly two years before it was margin-called into a forced sale. The leveraged portion of the portfolio was acquired by Citadel at a discount exceeding 10%, while client-capital-funded positions remained intact.