Citadel bought a discounted AI stock portfolio from the collapsed Situational Awareness, pushing July gains: flagship Wellington rose 5.9% for the month after the deal (it was up 0.45% pre-deal), while Citadel Equities and Tactical Trading gained 14.2% and 11.1% respectively and are each near 27% year-to-date. Situational Awareness fell from about $45 billion to $10 billion with leverage up to 4x and sold its public book at roughly a 10% discount; Citadel still holds the volatile AI positions (including an Anthropic stake worth about $5 billion) so August earnings will determine the trade’s payoff, underscoring market impact and risk relevant to crypto and DeFi markets.

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In Brief

Citadel funds gained in July after buying discounted AI stocks from Situational Awareness.
Flagship Wellington sat up 0.45% before the deal, then finished the month at 5.9%.
Citadel Equities jumped 14.2% and Tactical Trading 11.1%, both up 27% this year.

Three Citadel funds posted July gains after the firm bought a discounted portfolio of artificial intelligence stocks from Situational Awareness, the collapsed hedge fund run by former OpenAI researcher Leopold Aschenbrenner.

Ken Griffin’s flagship Wellington fund rose 5.9% for the month. Almost all of that gain arrived after the purchase.

Citadel Funds Made Half a Year’s Gain From One Deal

Wellington was up just 0.45% in July before the deal, Bloomberg reported. It closed the month at 5.9%.

CITADEL FUND UP 5.9% IN JULY AFTER SITUATIONAL AWARENESS DEAL: BBG pic.twitter.com/B5VqukPoYA
— Wall St Engine (@wallstengine) August 5, 2026

That gap is the story. The fund did almost nothing for three weeks, then made its year in days.

For scale, Wellington returned 10.2% across all of 2025. July alone delivered more than half of that.

Wellington is now up 12% in 2026. It has already beaten last year’s full result with five months still to run.

The firm’s other two books did better. Citadel Equities gained 14.2% and Tactical Trading added 11.1%, according to figures shared with investors.

Citadel took the top two spots in July, with Citadel Equities gaining 14.2% and Tactical Trading up 11.1%Both are now up 27% YTDimage credit: @negligible_cap pic.twitter.com/FijsrZcPrn
— Wall St Engine (@wallstengine) August 5, 2026

Both sit near 27% for the year. In all of 2025 they returned 14.5% and 18.6%.

Rivals moved the other way. Whale Rock’s flagship fund dropped 21.7% in July, erasing roughly half its 2026 gains.

Situational Awareness Had No Choice but to Sell

Situational Awareness peaked near $45 billion in early July. Weeks later it held about $10 billion.

The fund borrowed heavily. Its leverage ran as high as four times its own capital, which magnified every move.

It bet on AI infrastructure and against software. When chip and memory stocks slid, small losses turned large fast.

Its main holdings each fell more than 35% during the month. Goldman Sachs, JPMorgan Chase and Bank of America then demanded more collateral.

The fund could not meet those calls. It sold its whole public stock book, and Citadel took that leveraged equity portfolio at roughly a 10% discount.

The forced selling stopped. The same stocks bounced. Citadel already owned them.

A Playbook Griffin Has Run for 20 Years

None of this is new. In July 2007, Sowood Capital lost half of its $3 billion in under a month. Citadel bought its positions and profited as markets recovered.

A year before that, Amaranth Advisors collapsed on natural gas bets. Its energy book went to Citadel and JPMorgan.

The pattern is consistent. Griffin waits for a seller with no options, then names the price.

Aschenbrenner, 25, had returned 439% through June and more than 1,000% since launching in July 2024. His fund survives on private holdings, including a stake i n Anthropic worth about $5 billion.

Citadel has booked the gain but not sold the stocks. The volatility that broke Situational Awareness now sits on its own books.

August earnings from those same AI names will show what the discount was really worth.

Read the article at BeInCrypto