JPM cut off Situational Awareness lending

By the Editorial Team · Monday, September 14, 2026

JPMorgan Chase has cut off lending to the hedge fund Situational Awareness after the fund suffered tens of billions in losses and was forced to liquidate major assets. In response, Situational Awareness is partnering with Clear Street and rebuilding its technology-focused portfolio through specialized derivatives, aiming to recover despite a 67 percent drop in assets earlier this year.

JPMorgan Chase has ended its lending relationship with the hedge fund Situational Awareness, led by investor Leopold Aschenbrenner, following the fund's unprecedented losses in the hedge fund industry. Aschenbrenner, a prominent figure in the artificial intelligence investment space in his mid-twenties, endured losses amounting to tens of billions of dollars, forcing the fund to liquidate significant portions of its portfolio and reduce leverage.

JPMorgan, which had provided financing to Situational Awareness through its prime brokerage division, informed the fund of the decision to cease lending activities, according to individuals familiar with the matter. Both JPMorgan and Situational Awareness declined to comment.

In the wake of this development, Situational Awareness has initiated a partnership with Clear Street, a specialist brokerage, as it seeks to reconstruct a portfolio centered on aggressive technology-sector investments. Clear Street has not provided a statement regarding the relationship. Meanwhile, Morgan Stanley reportedly engaged in discussions with Situational Awareness since its inception but did not establish a formal banking relationship; the firm also declined to comment.

Earlier this year, Situational Awareness narrowly avoided collapse after offloading most of its public-market positions to Citadel, the hedge fund managed by Ken Griffin. Aschenbrenner pledged to investors that he would attempt to rebound from the setbacks, citing a 67 percent decline in the fund’s assets in July. Despite the turmoil, the fund reported an 80 percent gain for the year at that time.

Currently, Aschenbrenner is rebuilding substantial positions in semiconductor companies including AMD, Intel, SK Hynix, and Sandisk, as well as AI-focused startups such as CoreWave, according to sources familiar with the fund’s strategy. This effort has been supported by renewed relationships with Wall Street entities, including Clear Street and continuing banking ties with Goldman Sachs and Citigroup.

Recent trading activity by Situational Awareness has involved significant new investments through “flex options,” specialized derivative contracts that allow tailored terms and require access to large brokerages. These options enable the fund to pay modest premiums in exchange for leveraged exposure to anticipated gains in its holdings, reflecting a strategy designed to amplify potential returns amid a cautious recovery phase.

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