Jane Street absorbs $15 billion hit after AI hedge fund slump
Jane Street reported a $15 billion loss in July tied to its stake in AI-focused hedge fund Situational Awareness and a broader sell-off of tech stocks.
In a note to staff, Jane Street disclosed that July’s results were hurt by a $15 billion loss linked to its investment in the AI-oriented hedge fund Situational Awareness and a broader market decline in technology equities. Situational Awareness, led by former OpenAI researcher Leopold Aschenbrenner, experienced a steep drawdown after a strong first half, prompting a fire-sale of its holdings to Citadel, owned by billionaire Ken Griffin.
The trading house also suffered losses on long positions in Asian non-AI stocks, with several major memory and semiconductor companies falling roughly 50%. Despite the setback, Jane Street reported more than $40 billion in trading revenue so far this year, outpacing the largest banks and other market makers. The firm said it will become more selective with risk, having already closed a significant portion of the losing exposures and reduced risk-taking in other strategies. Jane Street could not be reached for comment at the time of reporting.
Why it matters
The loss highlights the volatility of AI-linked investments and could influence risk strategies across major trading firms.
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