Situational Awareness, the AI-focused hedge fund that was a brief Wall Street obsession, is having a very bad month.
Led by Leopold Aschenbrenner, a 20-something OpenAI graduate, the company focused on various AI investments and experienced tremendous growth for a time. Then, by the end of July, AI stocks had fallen, wiping out billions of dollars in value from the company. Federal regulators are also reportedly investigating the company.
The New York Times reported that the Securities and Exchange Commission is subpoenaing banks that do business with hedge funds. The subpoena focuses on the banks that oversaw the fund’s trading and channeled funds to support the fund, the outlet said.
The government reportedly warned banks to “preserve any information” about hedge funds, but Situation Awareness noted that they had not been accused of any wrongdoing.
Situational Awareness did not respond to TechCrunch’s request for comment, but told the Times it expects increased scrutiny of high-profile funds and “will fully cooperate with any regulatory requests.”
The company’s big push into the AI star could serve as a wake-up call to the industry’s seemingly unstoppable trajectory.
