Leopold Aschenbrenner's Situational Awareness Rebuilds AI Bets Amid Gamma Squeeze Speculation

Leopold Aschenbrenner's AI-focused hedge fund, Situational Awareness, has drawn renewed attention after rebounding from a dramatic July 2026 drawdown. The fund, which peaked near $45 billion in assets under management, suffered a reported 67% decline in July due to leveraged positions in AI-related stocks, forcing the sale of most of its public equity portfolio to Ken Griffin's Citadel.[1][2]

Following the liquidation, reports emerged in September 2026 that the fund had returned to the options market, purchasing significant call options on AI infrastructure names including AMD, Bloom Energy, CoreWeave, SK Hynix, and SanDisk, involving hundreds of millions in premiums.[3][4] These moves echo the fund's earlier aggressive strategy on semiconductor, memory, and power plays tied to AI scaling.

The timing coincided with market volatility, including a Nasdaq rally shortly after a Federal Reserve rate hike. Zero Hedge speculated that large options activity could trigger gamma squeezes—where dealer hedging of sold calls amplifies upward moves through dynamic stock purchases—potentially contributing to momentum in AI names.[5] While mainstream coverage confirms the options purchases and the fund's history, direct evidence linking these trades to specific index moves remains circumstantial, as full dealer positioning data is unavailable. Gamma effects are a recognized market dynamic, documented in analyses of options hedging and retail-driven squeezes.[6]

Aschenbrenner's fund retains substantial private holdings, notably in Anthropic, and continues to attract scrutiny for its concentrated AI thesis amid broader questions about leverage and market structure.