Citadel swoops in on Situational Awareness’s collapse, acquires $16B portfolio in 24 hours

When one of the hottest AI-focused hedge funds in the world loses 67% of its value in a single month, someone has to catch the falling knife. That someone was Citadel. Ken Griffin’s firm acquired the majority of Situational Awareness’s leveraged public-stock portfolio, valued at up to $16 billion, in a deal that closed around July 30, 2026. The entire transaction took roughly 24 hours. How Situational Awareness went from 439% returns to near-collapse Situational Awareness was, until very recently, the kind of fund that made other hedge fund managers quietly furious. Through June 30, 2026, the AI-focused fund had posted a net return of 439%. Its assets peaked at approximately $45 billion. Then July happened. A brutal selloff in semiconductor and AI stocks hammered the fund’s concentrated positions. By the time the dust settled, Situational Awareness’s assets had cratered to around $10 billion, a roughly 67% drawdown in a single month. When a fund that large starts liquidating in distress, the selling pressure alone can create a cascading crisis. By some estimates, without intervention, the forced selling could have triggered a deeper $3 trillion selloff in global semiconductor and A...