Situational Awareness, star AI hedge fund that nearly imploded, now being probed by the SEC
The AI hedge fund went from "the talk of Wall Street" to "subject of federal subpoenas" faster than you can say "diversify your portfolio."
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Situational Awareness, star AI hedge fund that nearly imploded, now being probed by the SEC
Situational Awareness, the AI-focused hedge fund that was Wall Streetβs fleeting obsession, is having a very bad month.
The company, led by twentysomething OpenAI alum Leopold Aschenbrenner, went all-in on a variety of AI investments and, for a period, enjoyed phenomenal growth. Then, at the end of July, a downturn in AI stocks erased billions of dollars in value at the firm. Now, federal regulators are reportedly probing the company as well.
The New York Times reports that the Securities and Exchange Commission has been subpoenaing banks that did business with the hedge fund. The subpoenas focus on the banks that supervised the fundβs trading and that channeled funding to support it, the outlet says.
The government reportedly warned the banks to βpreserve any informationβ about the hedge fund, though it noted that Situational Awareness has not been accused of any wrongdoing.
Situational Awareness did not respond to TechCrunchβs request for comment but told the Times that scrutiny of high-profile funds is to be expected, and that it would βcooperate to the fullest extent with any regulatory request.β
The company, which very publicly hitched its wagon to AIβs star, may serve as a cautionary tale about the industryβs supposedly unstoppable trajectory.
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