Jane Street took a $15 billion hit in July tied to its stake in AI-focused hedge fund Situational Awareness and long positions in technology stocks that declined during a broad market selloff, according to . July represented a milestone in the wrong direction for Jane Street — its trading revenue had not gone negative in any single month since 2016. In a note to employees, Jane Street executives called July a "bad month" and attributed part of the damage to a steep drawdown at Situational Awareness.
"We have an investment in Situational Awareness, an externally managed AI-focused hedge fund, that became large by performing well in the first half of the year," the note said. "They had a large drawdown that left our stake about flat on the year, but still up over the entire period we have been invested." The firm said hedges it had put in place provided little protection because losses in AI stocks accumulated throughout the month rather than in a sudden drop. Jane Street's pain extended beyond AI names, with long bets on Asian stocks outside the AI sector — many of which had been strong performers in prior months — also turning against the firm.
Despite the July setback, Jane Street's cumulative trading revenue for the year had climbed past $40 billion, surpassing the $39.6 billion it booked across the entirety of 2025. Since the losses, Jane Street said it has wound down a substantial share of exposure in the positions that drove the damage and has also grown more cautious across other parts of its book. Situational Awareness, which is run by Leopold Aschenbrenner, a former OpenAI researcher, lost roughly $35 billion in assets after margin calls from prime brokers forced a distressed sale of its publicly traded holdings to Ken Griffin's Citadel.
The fund, which peaked at $45 billion at the start of July, saw its assets drop to roughly $10 billion after Citadel acquired its leveraged positions — including SK Hynix and CoreWeave — at below-market prices. Situational Awareness had used as much as 400% leverage and built its public portfolio around bets on AI infrastructure companies. In the weeks that followed, Aschenbrenner moved to rebuild by making a $400 million investment in an undisclosed private company, the first public signal of his intentions after the near-collapse.
In a letter to investors, he pledged to draw lessons from the experience. Jane Street did not respond to a request for comment, according to .
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