Situational Awareness, Star AI Hedge Fund That Nearly Imploded, Now Being Probed by the SEC
Situational Awareness was the best-performing large fund in the world in June 2026, up 439% net, and by the end of July it had been forced to sell its entire public equity book to Citadel in a single pre-market block. The Securities and Exchange Commission has now subpoenaed Goldman Sachs, JPMorgan Chase, Citigroup and Bank of America for records of the fund’s trades, its borrowing and its conversations with lenders. This breakdown walks through what the regulator has asked for, how four times leverage turned a sector correction into a forced liquidation, what the fund actually owned, why Citadel bought the book at a reported ten per cent discount, why the headline figures in different outlets do not match, and what a business buying AI compute should take from the whole episode.