Ken Griffin says Citadel unwound 80% of – Business News
Ken Griffin stated in a letter to purchasers Friday that Citadel has unwound more than 80% of the “aggregate risk” tied to its last-minute buy of property from AI hedge fund Situational Awareness.
In a letter obtained by the Financial Times, Griffin revealed the firm has performed more than 100 block trades value over $4 billion in simply three weeks for the reason that buy – implying Citadel was in a position to efficiently flip AI wunderkind Leopold Aschenbrenner’s flailing portfolio.
Aschenbrenner, the 25-year-old “Nostradamus of AI,” had grown his hedge fund to $20 billion – regardless of having no prior Wall Street expertise – by betting all of it on AI. His firm held a $5.7 billion stake in SanDisk, a $5.6 billion one in Micron and short positions on some software program shares.
Ken Griffin stated in a letter to purchasers Friday that Citadel has unwound more than 80% of the “aggregate risk” tied to Situational Awareness. Bloomberg by way of Getty Images
But in late July, after weeks of rocky trading classes for AI and tech shares, Aschenbrenner was compelled to dump all of his public stock positions in a 24-hour fireplace sale to Citadel.
“Over our nearly thirty-six-year history, we have prided ourselves on being front-footed and proactive during periods of market dislocation,” Griffin wrote within the Friday letter. “Only Citadel could have delivered a solution of this scale on this timeline.”
Citadel didn’t instantly reply to The Post’s request for remark.
Citadel purchased the property at a roughly 10% low cost, hoping it may rapidly flip the positions as soon as the market rebounded, based on the Financial Times.
Since Griffin’s firm bought the portfolio, the AI commerce has began to bounce back. Shares of SanDisk and Micron have regained some losses.
Leopold Aschenbrenner, the so-called “Nostradamus of AI.” YouTube/Dwarkesh Patel
Citadel’s billions of {dollars}’ value of stock gross sales in simply a few weeks is a signal the hedge fund reaped huge earnings from the Eleventh-hour buy.
Griffin additionally stated within the letter that the firm’s flagship multistrategy Wellington fund noticed a 5.94% return in July, its best month-to-month efficiency since 2022.
Wall Street and Silicon Valley bigwigs had rushed to invest in Situational Awareness, together with Neil Mehta, co-founder of venture-capital firm Greenoaks; Dan Sundheim, founder of hedge fund D1 Capital Partners; investor Gaurav Kapadia’s basis; and Feroz Dewan, former head of public equities at Tiger Global Management, based on the Wall Street Journal.
Citadel purchased Situational Awareness’ public stock positions in a 24-hour fireplace sale. REUTERS
Some of these hotshot traders had warned Aschenbrenner – who was beforehand fired from OpenAI – in regards to the dangers of his investing strategy, based on the Journal.
Others had been growing pissed off in regards to the Germany-born founder’s lack of communication and disclosures, since Situational Awareness solely disclosed returns quarterly, not month-to-month like most different funds, the report stated.
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Situational Awareness had borrowed massively to finance its AI bets – and this backfired over the summer time as holdings nosedived and a few traders requested for his or her money back.
Jane Street, one of Wall Street’s prime investment banks and an investor in Situational Awareness, posted a $15 billion loss in July following the fund’s implosion.
In a letter in late July, Aschenbrenner instructed traders that Situational Awareness was nonetheless up 80% over the yr. He had earlier stated it was up more than 400% for the primary six months of 2026.
