Situational Awareness, the AI-focused hedge fund that was Wall Street’s fleeting obsession, is having a very bad month.
The company, led by 20-something OpenAI alum Leopold Aschenbrenner, made a variety of AI investments and, over a period, enjoyed phenomenal growth. Then, at the end of July, a drop in AI stocks. wiped out billions of dollars in value in the company. Now, federal regulators are also reportedly investigating the company.
The New York Times informs that The Securities and Exchange Commission has been subpoenaing banks that did business with the hedge fund. The subpoenas focus on banks that oversaw the fund’s operations and that channeled financing to support it, the outlet says.
The government reportedly warned banks to “preserve any information” about the hedge fund, although it noted that Situational Awareness has not been charged with any crime.
Situational Awareness did not respond to TechCrunch’s request for comment, but told the Times that scrutiny of high-profile funds is to be expected and that it would “cooperate to the fullest extent possible with any regulatory requests.”
The company, which publicly joined forces with the AI star, may serve as a warning about the industry’s supposedly unstoppable trajectory.