Jane\u00a0Street\u00a0took a $15 billion hit in July from its exposure to AI-focused hedge fund Situational Awareness and other tech stocks that were battered by the market selloff, according to two people familiar with the matter and a note seen by Reuters.<\/p>\n
The secretive Wall\u00a0Street\u00a0trading giant<\/a>, however,\u00a0has generated\u00a0trading revenue of more than\u00a0$40 billion year to date, one of the sources said, easily outstripping trading\u00a0revenue\u00a0at the largest banks and other\u00a0market-making\u00a0rivals.<\/p>\n In July, Situational, which is run by Leopold <\/a>Aschenbrenner, nicknamed the \u201cNostradamus of AI\u201d<\/a> and a former OpenAI researcher, offloaded the bulk of its stock portfolio in what was a fire sale to billionaire Ken Griffin\u2019s Citadel after being hurt by the AI selloff that\u00a0triggered\u00a0margin calls at the firm<\/a>.<\/p>\n In July, Situational, which is run by Leopold Aschenbrenner, a former OpenAI researcher, offloaded the bulk of its stock portfolio in what was a fire sale to billionaire Ken Griffin\u2019s Citadel. Linkedin\/Leopold Aschenbrenner<\/p>\n Situational counts\u00a0Jane\u00a0Street\u00a0among its investors.<\/p>\n In a\u00a0note to\u00a0employees on Friday, executives at\u00a0Jane\u00a0Street\u00a0said July was a \u201cbad month\u201d for the firm, blaming the drawdown at Situational\u00a0for contributing\u00a0to its poor performance during the month.<\/p>\n \u201cWe have an investment in Situational Awareness, an externally managed AI-focused hedge fund, that became large by performing well in the first half of the year. They had a large drawdown that left our stake about flat on the year, but still up over the entire period we have been invested,\u201d according to the note to employees that was seen by Reuters.<\/p>\n The firm also took a hit from its long positions in\u00a0non-AI\u00a0stocks in Asia, many of which had outperformed the markets earlier during the year.<\/p>\n Jane\u00a0Street\u00a0took a $15 billion hit from its exposure to AI-focused hedge fund Situational Awareness and other tech stocks that were battered by the market selloff. REUTERS<\/p>\n \u201cWe largely lost on the same portfolio of trades that had strong outperformance in the second quarter. AI-exposed stocks were down a lot during July, several of the largest memory and semiconductor stocks were down around 50%,\u201d\u00a0Jane\u00a0Street\u00a0said in the note.<\/p>\n Jane\u00a0Street\u00a0said it would be \u201cmore selective\u201d about risk, adding that the firm has \u201cclosed a significant portion of our risk in the specific areas we lost on in July, and have also reduced risk taking in other strategies.\u201d<\/p>\n \u201cAI-exposed stocks were down a lot during July, several of the largest memory and semiconductor stocks were down around 50%,\u201d\u00a0Jane\u00a0Street\u00a0said in the note. Wall Street traders, above. REUTERS<\/p>\n Jane\u00a0Street\u00a0could not be immediately reached for comment.<\/p>\n","protected":false},"excerpt":{"rendered":"Jane\u00a0Street\u00a0took a $15 billion hit in July from its exposure to AI-focused hedge fund Situational Awareness and other…\n","protected":false},"author":3,"featured_media":1001665,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[21],"tags":[691,738,64,16236,4209,158,67,132,68,3642],"class_list":["post-1001664","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-business","tag-hedge-funds","tag-investments","tag-technology","tag-united-states","tag-unitedstates","tag-us","tag-wall-street"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/117097601879022981","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/1001664","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=1001664"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/1001664\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/1001665"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=1001664"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=1001664"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=1001664"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}