Odaily Planet Daily report: Wall Street quantitative trading giant Jane Street suffered approximately $15 billion in losses during July’s market sell-off due to its investments in the AI-themed hedge fund Situational Awareness and other technology stocks.
According to insiders, despite a significant drawdown in July, Jane Street's trading revenue this year has exceeded $40 billion, far surpassing that of global major banks and other market makers, and exceeding its full-year 2025 trading revenue of $39.6 billion.
Jane Street confirmed in an internal memo to employees that July was a "bad month" for the company. The firm stated that its investment in the AI-themed hedge fund Situational Awareness had previously increased its position due to strong performance in the first half of the year, but suffered significant drawdowns during the recent decline in AI stocks, bringing Jane Street’s related returns for the year nearly back to breakeven—though still profitable compared to the initial investment.
Situational Awareness, founded by former OpenAI researcher Leopold Aschenbrenner, attracted market attention for its heavy positioning in AI-related stocks. After the AI sector experienced a significant correction in July, the fund sold most of its stock positions to Citadel, led by billionaire Ken Griffin, to meet margin requirements.
Jane Street said the losses also stemmed from its non-AI long positions in Asian stocks, which had performed strongly earlier this year. The company noted that many large storage and semiconductor stocks fell by approximately 50% in July, leading to drawdowns in its previously strong-performing trading portfolio. (Reuters)