The $35 billion headline, and three lessons for anyone who gives credit

A fund run by a 25-year-old former OpenAI researcher was reported to be worth around $45 billion at the start of July. By the middle of August, reports put it nearer $10 billion. The headlines called it "$35 billion lost in a month".

The real story is messier than that, and more useful. If you sell to other businesses on credit, it carries three lessons you can act on this week.

What happened

Leopold Aschenbrenner left OpenAI in 2024 and set up Situational Awareness, a hedge fund that bets heavily on the companies building AI: chipmakers, memory makers and the data-centre firms that rent out computing power. Early backers reportedly included the Collison brothers, who founded Stripe.

For a while it worked spectacularly. An investor letter reported by Hedgeweek put the fund up 439% after fees in the first half of 2026.

Then, in late July, AI and memory stocks fell hard. The fund's biggest holdings were Sandisk and Micron. Its own filing for the end of June shows those two made up more than half of its US-listed shares. CNBC reported steep losses on 30 July. Within weeks the fund had sold its listed shares to Citadel, and reports put what remained at about $10 billion.

What the headline gets wrong

"$35 billion lost" is the gap between two numbers, and neither is solid.

The $45 billion came from one person familiar with the fund, quoted by CNBC. CNBC itself said the size of the losses could not be determined.
The Financial Times put the fund at about $20 billion. Its quarterly filing showed about $20 billion of US-listed shares.
Borrowed money. The fund was reported to use leverage of up to 400%. That means much of the $45 billion may have been borrowed. So nobody has shown that $35 billion of investors' own money disappeared.

The October sell-off in AI shares came later. CoreWeave fell more than 15% in a day, and chip stocks lost more than $1.6 trillion in six trading sessions. No report has linked that to fresh losses at the fund.

The "fresh capital" is also not what it sounds like. Bloomberg reported on 29 October that the fund is inviting its clients to co-invest in a fundraise for Fluidstack, a data-centre company it already backs, at a $40 billion valuation. That's money for one deal, not new money for the fund. In August, Aschenbrenner told investors the fund wasn't taking new money for now.

Three lessons for anyone who gives credit

1. Concentration cuts both ways

Two holdings made up more than half of the fund's listed portfolio. When they fell, everything fell. Your customers can be the same. A contractor with one big client, a wholesaler tied to one retailer, a supplier whose order book is half one project: they look healthy right up to the day that one relationship goes wrong.

Ask how much of your customer's business depends on a single source of income. If the answer is "most of it", set your credit limit with that in mind.

2. Borrowing turns a bad month into a crisis

Leverage multiplied the fund's gains on the way up and its losses on the way down. Businesses work the same way. A company carrying heavy loans has less room when trade slows. One sign that new borrowing has been secured against a company's assets is a new charge filed on the public register.

3. By the time it's news, it's late

The fund's troubles were reported weeks after they began. For most businesses there's no headline at all. The first sign is often a missed payment, by which time other creditors may already be chasing.

The warning signs usually come earlier and quietly: accounts filed late, directors leaving, new secured borrowing, and in the worst cases a creditor going to court. Each of these is public. The hard part is noticing in time.

The takeaway

You don't need to follow hedge funds to learn from this one. Fortunes can change in weeks, headlines often get the details wrong, and the businesses that get paid are the ones that spot trouble early.

That's what CreditorTrack UK does for your customers. Add the businesses that owe you money and we'll tell you the moment one of them shows a warning sign, while there's still time to act.

The $35 billion headline, and three lessons for anyone who gives credit

What happened

What the headline gets wrong

Three lessons for anyone who gives credit

1. Concentration cuts both ways

2. Borrowing turns a bad month into a crisis

3. By the time it's news, it's late

The takeaway

Sources

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