What smart people are saying about the Situational Awareness stock sell-off to Citadel

• Leopold Aschenbrenner’s AI-focused fund sold most of its stock portfolio to Citadel.
• The sale came after Situational Awareness experienced major losses in AI-related positions.
• Investors are weighing in on what it says about Wall Street and trading in AI.

“It’s the saddest, most Machiavellian thing. But he sort of had to blow up. There’s no other ending. Because of the leverage level,” he said.

He also said he thinks Aschenbrenner is “brilliant” and could still have a future in investing despite this being an “extremely humbling moment.”

“He’ll be back and successful,” he said.

Tim Culpan, former Bloomberg columnist

Tim Culpan, a former Bloomberg columnist, said the “meltdown” at Situational Awareness “shows the difference between intelligence and wisdom.”

“Even if his investment thesis is spot on in the long-term, leveraged positions remove wiggle room to ride out the massive sell offs that inevitably occur in a hot market,” he wrote in LinkedIn.