Imagine turning $225 million into $20 billion in just two years. That’s exactly what Leopold Aschenbrenner’s AI-powered hedge fund, Situational Awareness LP (SALP), managed to do before hitting a major speed bump. Starting from scratch in 2024, SALP rode the AI infrastructure wave, making massive bets on companies like Bitcoin miners Riot Platforms and semiconductor giant SK Hynix. By mid-2026, the fund boasted gains over 1,000% and assets nearing $45 billion.
SALP’s strategy was clear capitalize on the AI supercycle by concentrating investments in a narrow set of high-growth tech stocks. Early backers weren’t your average investors either. Heavy hitters like the Collison brothers and Jane Street jumped in, giving the fund both credibility and deep pockets. To juice returns further, SALP used up to 4x use, amplifying its positions dramatically.
But use can be a double-edged sword. In late July 2026, the AI sector stumbled. A key holding, SK Hynix, dropped sharply, and some short positions, including Adobe, moved against SALP. This created heavy margin pressure the fund couldn’t handle. The result was a forced liquidation of its entire public equity portfolio, sold off to a single buyer a sign of urgent distress. The fund’s assets under management shrank from a peak of $45 billion to just over $9 billion by the end of 2025, highlighting the volatility use injected.
This episode shows the risks of aggressive use, even when riding a wave as promising as AI. SALP’s meteoric rise now serves as a cautionary tale about the fine line between amplified gains and devastating losses.
This content is informational and not financial advice.
