Jane Street took $15 billion hit in July from Situational Awareness exposure

Jane Street, one of Wall Street's most powerful trading firms, suffered approximately $15 billion in losses in July from its exposure to AI-focused hedge fund Situational Awareness, according to a Reuters exclusive citing two people familiar with the matter.investing

The loss stems from the broader collapse of Situational Awareness, the hedge fund founded by former OpenAI researcher Leopold Aschenbrenner, which saw its portfolio value plunge 67% in July amid a sharp selloff in AI stocks, according to a Reuters report from late July citing an investor letter. The Wall Street Journal News Corp ↗ 0.73% also confirmed the roughly $15 billion loss on Friday.wsj+1

Despite the hit, Jane Street has still generated more than $40 billion in trading revenue year to date, one of the sources told Reuters.investing

The Rise and Fall of Situational Awareness

Aschenbrenner launched Situational Awareness in mid-2024 with anchor investments from Stripe co-founders Patrick and John Collison, GitHub's former CEO Nat Friedman, and investor Daniel Gross. The fund grew rapidly, surpassing $20 billion in assets under management by June 2026 with Jane Street among its backers, The Wall Street Journal reported at the time.situational-awareness+1

At its peak, the fund's assets reached roughly $45 billion, fueled by enormous gains on leveraged bets in AI-related semiconductor and infrastructure stocks. But leverage reportedly as high as 400% proved catastrophic when AI stocks turned south in July, triggering margin calls that forced Aschenbrenner to liquidate positions — including holdings in SK Hynix and CoreWeave ↘ 0.97% — selling to Citadel's Ken Griffin at a discount, CNBC reported.cnbc

Jane Street's Resilience

The $15 billion loss, while substantial, represents a fraction of Jane Street's overall 2026 performance. The firm recorded $16.1 billion in trading revenue in the first quarter alone — more than double its haul from the same period in 2025 — according to Bloomberg. Net income in that quarter exceeded $10.3 billion.bloomberg

In 2025, Jane Street generated $39.6 billion in net trading revenue for the full year, Reuters reported. The firm could not immediately be reached for comment on the July loss.reuters+1