Situational Awareness, star AI hedge fund that nearly imploded, now being probed by the SEC

In Brief

Situational Awareness, the AI focused hedge money that was Wall Street’s fleeting obsession, is having a precise atrocious month.

The company, led by twentysomething OpenAI alum Leopold Aschenbrenner, went all-in connected a assortment of AI investments and, for a period, enjoyed phenomenal growth. Then, astatine the extremity of July, a downturn successful AI stocks erased billions of dollars successful worth astatine the firm. Now, national regulators are reportedly probing the institution arsenic well.

The New York Times reports that the Securities and Exchange Commission has been subpoenaing banks that did concern with the hedge fund. The subpoenas absorption connected the banks that supervised the fund’s trading and that channeled backing to enactment it, the outlet says.

The authorities reportedly warned the banks to “preserve immoderate information” astir the hedge fund, though it noted that Situational Awareness has not been accused of immoderate wrongdoing.

Situational Awareness did not respond to TechCrunch’s petition for remark but told the Times that scrutiny of high-profile funds is to beryllium expected, and that it would “cooperate to the fullest grade with immoderate regulatory request.”

The company, which precise publically hitched its wagon to AI’s star, whitethorn service arsenic a cautionary communicative astir the industry’s supposedly unstoppable trajectory.

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