U.S. hedge fund giant Citadel acquired a distressed public equity portfolio from Situational Awareness, an artificial-intelligence-focused hedge fund founded by Leopold Aschenbrenner, in late July 2026 at an estimated $10 billion to $16 billion. The fund had watched its assets shrink from nearly $45 billion to around $10 billion after a brutal rout in AI and semiconductor stocks triggered margin calls and forced liquidations. By August 21, Citadel had executed nearly 100 block trades worth more than $4 billion, unwinding over 80% of the acquired risk. The move generated immediate gains for Citadel’s flagship Wellington fund, which posted a 5.9% return in July 2026, its strongest monthly performance since 2022. By absorbing the forced selling in an orderly fashion and distributing risk across dozens of counterparties, Citadel prevented a potential uncontrolled cascade through chip and AI stocks. Ken Griffin described the episode as a testament to the firm’s ability to rapidly assess and manage complex investment risks.