One of the hottest hedge funds in artificial intelligence received a bailout to stay afloat on Thursday amid a sudden drop in value for its investments.

The fast-moving crisis unfolded over just 36 hours at Situational Awareness, a once-envied investment firm in San Francisco led by 20-somethings, including a former employee of OpenAI. The firm put out an emergency call for help to rivals, seeking to sell more than $10 billion of its stock to shore up its plummeting portfolio, according to three people briefed on the call.

After a brief bidding war overnight, the hedge fund Citadel — founded by the billionaire Kenneth Griffin — agreed to step in with the needed cash, so long as it received a substantial discount on the investments, the three people said.

The move forestalled the immediate danger for Situational Awareness, but it has put many on Wall Street on edge. Several recent crises have begun with struggling hedge funds forced to unwind — most recently in 2021, when the collapse of Archegos, a family office that started as a hedge fund, ended up taking down the bank Credit Suisse along with it.

Article source: https://www.nytimes.com/2026/07/30/business/artificial-intelligence-situational-awareness-citadel.html