Citadel’s acquisition of Situational Awareness’s public-stock portfolio has placed two separate Ken Griffin-founded businesses on different sides of the same market shock. Citadel Securities publicly advocated a surprise Federal Reserve rate increase on July 27. Three days later, The Wall Street Journal reported that Citadel had acquired most of a distressed AI portfolio after its owner suffered heavy losses.
The Journal, citing people familiar with the matter, reported that Situational Awareness sold the bulk of its stock portfolio after losses in AI-related positions. The firm had recently sought buyers for its holdings while attempting to raise additional capital.
The Financial Times separately reported that Citadel acquired a significant portion of approximately $16 billion in public-equity holdings through a transaction assembled within 24 hours. Goldman Sachs and JPMorgan Chase, which served as prime brokers to the fund, helped facilitate the transaction, according to the FT. Millennium Management also considered participating.
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Situational Awareness sold its entire public-equities portfolio to Citadel, Axios reported. Neither Citadel nor Situational Awareness has publicly disclosed the purchase price or the exact assets transferred.
The sale represents a sharp reversal for Situational Awareness, which former OpenAI researcher Leopold Aschenbrenner launched in 2024. The fund had grown to more than $20 billion in assets after producing gains of roughly 1,000% since inception, according to previous Wall Street Journal reporting.
The fund gained 439% during the first half of 2026 before concentrated and leveraged AI positions were hit by the recent technology selloff, according to The Financial Times. The firm reportedly plans to retain its private investments, including a stake in Anthropic valued at approximately $5 billion, and continue operating as a private-investment vehicle.
Situational Awareness’s latest Form 13F reported $13.68 billion across 42 entries as of March 31. The disclosed portfolio included approximately $2.04 billion of put positions tied to the VanEck Semiconductor ETF, $1.57 billion of Nvidia puts, $1.07 billion of Oracle puts, and $1.01 billion of Broadcom puts.
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It also reported public-equity positions in Bloom Energy, CoreWeave, Sandisk, IREN, and Core Scientific. The mixture of long holdings, calls, and puts indicates that the public portfolio was not simply an unhedged bet on rising AI stocks.
Citadel Securities published its July rate call two days before the Federal Reserve’s decision. The firm argued that an unexpected increase would act as a “cleansing event” by forcing markets to price economic data instead of relying on advance policy guidance.
The note framed the proposed move as a central-bank credibility strategy. It did not discuss Situational Awareness, individual AI securities, or any potential asset acquisition by Citadel.
The Federal Reserve rejected that course. The Federal Open Market Committee voted 9-3 on July 29 to leave the federal-funds target range at 3.50% to 3.75%. Beth Hammack, Neel Kashkari, and Lorie Logan dissented in favor of a 25-basis-point increase.
The surprise hike advocated by Citadel Securities therefore never occurred. The subsequent claim that its analysis was intended to accelerate a selloff for Citadel’s benefit can be argued as unsupported.
But if the Fed had raised rates unexpectedly, the resulting jump in borrowing costs and market volatility could have intensified pressure on highly valued AI stocks and leveraged funds, potentially triggering additional margin calls and forced selling. That, in turn, could have weakened Situational Awareness’s negotiating position and improved the terms available to a cash-rich buyer such as Citadel.
The sequence would still not prove coordination or misconduct, but it would make the overlap between Citadel Securities’ policy advocacy and Citadel’s financial opportunity far more consequential.
