Embattled hedge fund Situational Awareness invests $400M in chip startup Source Foundry

Situational Awareness is still writing huge checks, even after a rough stretch. This week, the AI-focused hedge fund put $400 million into Source Foundry, a startup from Stanford researchers that wants to make chip manufacturing faster and cheaper, according to The Wall Street Journal.

That new money lifts Situational Awareness’ total investment in Source Foundry to $500 million. For a fund that reportedly had to unload most of its public portfolio last month, the size of that bet stands out. It suggests Leopold Aschenbrenner is not exactly in the mood to go conservative.

Aschenbrenner founded the fund in 2024. He was a former OpenAI researcher in his mid-twenties with no trading experience when he started. Early returns were said to be strong, but the last few months have been ugly as AI infrastructure stocks slid.

At the end of July, Situational Awareness sold most of its public holdings to Ken Griffin’s Citadel, though it kept its Anthropic shares. Its assets under management reportedly dropped from $20 billion to $10 billion. And yet the fund is still finding room for giant private bets, which tells you something about how Aschenbrenner sees the next wave of AI bets — or how little he likes backing down.