The sudden collapse of a $20 billion AI fund reveals why Bitcoin is the first thing Wall Street sells when margin calls hit

A $20 billion AI hedge fund gained 439% through June, lost roughly two-thirds of its value in July, and sold most of a $16 billion public-stock portfolio as leverage turned against it. The collapse offers a warning for Bitcoin: when Wall Street needs cash quickly, the first asset sold may not be the one that caused the loss, but the one still trading.

Leopold Aschenbrenner built one of Wall Street’s most persuasive investment pitches. The former OpenAI researcher argued that artificial intelligence was advancing fast enough to reshape energy, national security, computing, and nearly every large industry, then built a hedge fund around the companies supplying that future.

Situational Awareness invested in chips, power, storage, data centers, and other infrastructure expected to support the AI boom. The thesis initially worked almost too well: the fund gained 439% from the start of 2026 through June and grew to manage roughly $20 billion.

Then in July, it lost about 67% of its value.

The fund eventually sold most of a public-equity portfolio once estimated at $16 billion to Ken Griffin’s Citadel. Reported holdings included Broadcom, Intel, and CoreWeave, all closely linked to the enormous buildout behind AI.

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