Prof G Markets · Tuesday, August 4, 2026
A 24-year-old named Leo's AI-focused fund, "Situational Awareness," experienced a dramatic collapse, losing approximately $35 billion in assets and plunging from $45 billion to $10 billion. This event is being viewed as a cautionary tale for the highly leveraged AI boom.
“For months, investors have been asking how the AI boom might end, and last week, they got a glimpse. 24-year-old Leo's, "Situational Awareness", sent a letter to investors on July 24th, reporting a 439% net return for the first half of the year.”
“But just six days later, the fund had lost roughly $35 billion in assets, plunging from a peak of $45 billion to around $10 billion. And Asher was forced to unwind his entire stock portfolio in a firesale that ended up going to Ken Griffin's Citadel.”
“Investors are reading this story as a warning sign for the increasingly debt-fueled AI boom. Situational Awareness reportedly uses as much as 400% leverage to amplify its bets on AI infrastructure.”