Smart People React to Situational Awareness Stock Sell Off to Citadel
Business Insider’s Alistair Barr compared the fund’s implosion to the collapse of Long-Term Capital Management and Peter Thiel’s Clarium Capital. Both funds showed how a sound thesis doesn’t guarantee a winning trade.
In Situational Awareness’s case, the market turned on the fund, but “that doesn’t necessarily mean Aschenbrenner’s ideas” on AI infrastructure are wrong, Barr wrote.
Barr proposed that one possible explanation behind the fund’s downfall could be the sell-off of South Korean memory-chip stocks in June, which triggered margin calls. Thus, leading to a vicious feedback loop that spread into other AI-related stocks owned by Situational Awareness.
