KEY POINTS Situational Awareness was forced to liquidate its public assets to Kenneth Griffin's Citadel at a steep discount following margin calls from major prime brokers. Goldman Sachs data shows hedge fund leverage surged to record levels in 2026, underscoring broader concerns about AI-related market exposure. After posting a 439% return for the first half of 2026, according to an investor letter seen by the Financial Times, Situational Awareness found itself scrambling to meet margin calls just weeks later. That served as Situational Awareness' investment thesis and powered the fund's remarkable ascent. The explosive growth of Situational Awareness reflected Wall Street's willingness to aggressively fund AI-related opportunities, while its abrupt unwind showed how quickly market sentiment and financing conditions can change.