AI hedge fund Situational Awareness may have sold its public portfolio, but it still has its Anthropic shares

The financial side of the artificial intelligence boom has always been as dramatic as the underlying technological breakthroughs. Over the past year, a new cohort of fund managers—former researchers and insiders emerging directly from labs like OpenAI and Google DeepMind—attempted to monetize their technical expertise through specialized hedge funds. Among the most closely watched was Situational Awareness, an AI-focused fund built on the bold thesis that superintelligence is arriving significantly faster than public markets appreciate. However, financial markets have a brutal, uncompromising way of separating long-term vision from short-term liquidity risk. Following a period of intense volatility in public equities, the fund was forced to unwind its leveraged public portfolio after aggressive bets on public tech stocks suffered steep drawdowns.

Yet, examining the mechanics behind Situational Awareness’s portfolio liquidation reveals a far more nuanced story about how capital is truly allocated in the AI race. While liquid holdings were sold off to manage exposure and meet leverage obligations, the fund retained its prized private equity holdings—most notably, its stake in Anthropic. This stark divide between dumping public tech stocks and fiercely guarding private allocations in frontier model builders highlights a growing consensus among AI insiders: while public markets are vulnerable to macroeconomic fluctuations and trader fatigue, early private stakes in primary AI laboratories represent irreplaceable options on the future foundation of global computing.

The Volatility of Public AI Bets vs. Private Moats

The rapid unwinding