Value Aligned Research Advisors, a hedge fund built around the artificial intelligence investment theme, suffered a 44% loss in July as a sharp selloff in AI-related stocks hit crowded positions across the sector, according to a report by Bloomberg. The report cites an unnamed person familiar with the performance as revealing that decline reduced gains for VARA’s flagship AI Fund to about 65% for the year through July. The New Jersey-based firm managed about $26.4bn at the end of June, just 16 months after launching its hedge fund operations. VARA’s portfolio has significant overlap with that of Situational Awareness, the AI-focused hedge fund founded by Leopold Aschenbrenner. The overlapping positions accounted for about 93% of Situational Awareness’ disclosed stock portfolio by value, compared with roughly 27% for VARA.