SEC probes AI fund Situational Awareness collapse

The U.S. Securities and Exchange Commission has launched an investigation into Situational Awareness, the artificial intelligence-focused hedge fund that experienced a dramatic collapse in late July 2026. The probe, which involves subpoenas sent to major Wall Street banks, examines the fund's trading activity and financial dealings with its lenders. The investigation centers on the fund's operations during a period of severe financial distress. Situational Awareness, founded and managed by 24-year-old former OpenAI researcher Leopold Aschenbrenner, saw its value plummet by approximately 67% in late July amid a broader selloff in AI-related stocks.