Situational Awareness generated more lending fees for Goldman Sachs this year than any other client in the prime-brokerage arm that finances hedge funds. The bank collected more than $200 million from the relationship, the Financial Times reported, citing people familiar with the matter. Goldman has not disclosed the figure itself.
The fund is two years old and ran on eight employees, four of them investment professionals. Leopold Aschenbrenner, fired from OpenAI‘s Superalignment team in April 2024, launched Situational Awareness LP that year, building on his AGI thesis essay of the same name. Early backers included Stripe‘s Patrick and John Collison, former GitHub chief executive Nat Friedman, and investor Daniel Gross. Jane Street joined later too, an unusual step for a firm that rarely backs outside managers.
Three borrowed dollars for every one of its own: How a young fund built a $200M+ book
Situational Awareness ran concentrated, leveraged bets on AI infrastructure: chips, power, data centres. Leverage reportedly reached close to four times capital, roughly three borrowed dollars for every dollar the fund put up itself. That financing is what generated Goldman’s fee income, and Goldman leaned into the relationship early. It reportedly began financing the fund shortly after launch, and later showcased it at an emerging-manager conference reportedly in March 2025.
The arrangement worked in both directions while the trade worked. Borrowed capital let a handful of people control a portfolio worth many multiples of their own capital, and every dollar borrowed generated financing income for whichever bank lent it. It also meant that when the trade turned, losses arrived amplified and fast, and Goldman’s exposure moved just as quickly as the fund’s.
A concentrated book, then a 67% month
Situational Awareness’s 13F for the quarter ending 30 June, filed with the U.S. Securities and Exchange Commission (SEC) on August 14, reported $20.24 billion in reportable securities. SanDisk and Micron Technology alone made up 55.6% of that figure. The rest of the book leaned heavily into AI-adjacent names, including several bitcoin miners repositioned as AI data-centre operators, such as Core Scientific, Riot Platforms and CleanSpark.
That $20.24 billion figure is not the fund’s total size, and treating it as such is the easiest way to misread this story. After the sale the remaining book was reported at about $8 billion to $10 billion, down from a peak that press accounts put in the tens of billions. That swing is far larger than anything the 13F shows. The gap is the point: a 13F catches only long, US-listed public positions. SK Hynix, reportedly one of the fund’s largest holdings, does not appear in the filing at all, because it trades in Seoul, not New York. Private stakes, short positions, gross leverage and cash all sit outside the form too.
In July, the fund’s portfolio value fell 67%, according to an investor letter reviewed by Reuters, as a broad AI-stock selloff hit its core positions hard and fast. Aschenbrenner told investors the fund had come “closer to permanent capital impairment than is acceptable to us.”
Citadel bought the book, Jane Street took the bigger hit
Facing margin calls, Situational Awareness sold most of its roughly $16 billion public-equity book to Citadel at a reported discount of more than 10%, as Disruption Banking covered at the time. Citadel did not buy the entire fund. Aschenbrenner kept private holdings, including a stake in Anthropic, and removed leverage from what remained.
Goldman’s fee income survived the episode. Not all of its investors came away so lightly. Jane Street, one of the fund’s backers, lost roughly $15 billion tied to its exposure to Situational Awareness and other tech stocks, said to be its first losing month in roughly a decade. That figure has nothing to do with what Goldman earned in lending fees. It is a reminder that the same leverage which built Goldman’s fee income also transmitted losses well beyond the fund itself.
JPMorgan walked away; Goldman did not
Reuters later reported that JPMorgan ended its lending relationship with the fund in September, citing the losses, while Goldman Sachs, Citigroup and Bank of America stayed on as brokers. Situational Awareness has since started working with Clear Street, a newer brokerage, replacing some of the capacity JPMorgan withdrew.
Subpoenas, not accusations: What the SEC is actually asking
The SEC sent subpoenas to Goldman, JPMorgan, Citigroup and Bank of America, seeking information on trade timing and lender communications around the fund’s leverage, and instructing the banks to preserve their records. That is a records request. It carries no accusation, and no enforcement action has followed. All four were among the fund’s top lenders. All four do business with Citadel, the eventual buyer. None of that is evidence of wrongdoing on its own, but it explains why regulators would want the paper trail.
Situational Awareness said scrutiny of “funds that are high profile, produce significant returns, or have particularly dramatic drawdowns” was to be expected, and that it would cooperate fully with any regulatory request.
One relationship, all the risk: Why this matters beyond one fund
A single, young, thinly staffed fund became Goldman’s top prime-brokerage earner. That is a concentration story as much as a fee story, and not a new one on Wall Street. Archegos Capital Management ran a similarly concentrated, leveraged book through several prime brokers in 2021, and when it unwound, Credit Suisse and Nomura found their collateral did not cover what they were owed. Situational Awareness has not produced anything like that outcome: Citadel bought the book in an orderly sale rather than a forced liquidation into the open market, and Goldman kept both the client and, apparently, the fee income. But the mechanism that makes both stories worth watching is the same one. A bank’s hedge-fund financing book can lean hard on one relationship long before anyone outside it can see how far.
None of the numbers that would actually answer that question is public. Goldman has not disclosed its peak lending exposure to Situational Awareness, the collateral haircuts it applied, or how that exposure was shared with its other prime brokers before July. Until one of those figures surfaces, whether through an SEC filing, a bank disclosure or a leaked term sheet, the $200 million tells you what Goldman made. It does not tell you what Goldman risked to make it. The fund’s next 13F, covering September 30 and due by November 16, will show what is left of the public book. It will not answer that question.
Author: Richardson Chinonyerem
The editorial team at #DisruptionBanking has taken all precautions to ensure that no persons or organisations have been adversely affected or offered any sort of financial advice in this article. This article is most definitely not financial advice.
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Can the Situational Awareness Hedge Fund Raise Capital After its 439% H1 Gain? | Disruption Banking