SUNDAY, OCTOBER 11, 2026|No. 18299
Technology · Investment

Hedge Fund Bets Big on AI Chip Startup Despite Portfolio Losses

Situational Awareness, an AI-focused hedge fund, has invested an additional $400 million in chip startup Source Foundry, bringing its total investment to $500 million, despite recent portfolio challenges.

A close-up of a complex computer chip with glowing blue circuits.
A close-up of a complex computer chip with glowing blue circuits.
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Situational Awareness may have had to sell off the majority of its public portfolio last month, but the AI-focused hedge fund is still making some big bets.

This week, the fund invested $400 million into Source Foundry, a startup founded by Stanford researchers aiming to make chip manufacturing faster and cheaper, according to The Wall Street Journal. That brings its total investment in Source Foundry to $500 million.

Situational Awareness was founded by Leopold Aschenbrenner, a former OpenAI researcher in his mid-twenties who had no trading experience when he launched the fund in 2024. Early returns were reportedly strong, but the fund faced steep losses in recent months amidst the decline in AI infrastructure stocks.

At the end of July, Situational Awareness sold off the majority of its public portfolio to Ken Griffin’s Citadel, although the fund held on to its Anthropic shares. Its assets under management reportedly fell from $20 billion to $10 billion.

On the bright side, Aschenbrenner didn’t let those setbacks get in the way of his wedding.

PAN's pipeline reviewed approximately 4 open sources for this article. No human editor reviewed this article before publication.

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