Situational Awareness, a hedge fund focused on artificial intelligence, lost billions of dollars after a sharp drop in AI company shares. The fund was started by Leopold Aschenbrenner, a former OpenAI researcher. Its reported assets fell quickly from about US$45 billion to US$10 billion in just a few weeks, according to CNBC.

The main reason for this loss was falling prices of semiconductor shares. Because of these losses, lenders told the fund it must sell some of its biggest investments in AI companies like SK Hynix and CoreWeave. These shares were then sold to investment firm Citadel at a lower price.

As a result, a hedge fund that had gained over 1,000% since 2024 became an example of how quickly financial success can disappear. Now, many investors are more careful with AI stocks.