Situational Awareness Forced to Offload Holdings to Citadel Last Week as BofA CEO Warns on Leverage

According to CNBC, high-flying AI hedge fund Situational Awareness, led by Leopold Aschenbrenner, was forced to offload most of its public equities to Citadel last week in a fire sale after its artificial intelligence bets soured. Bank of America, Goldman Sachs, and JPMorgan Chase served as the fund's prime brokers, providing leverage and executing trades.

Bank of America CEO Brian Moynihan called the near-collapse a "warning shot" for financial markets fueled by elevated valuations and borrowed money. "Valuations get out, leverage in the system gets there. You have to be careful," Moynihan told CNBC's Andrew Ross Sorkin, suggesting Wall Street's largest brokers are reexamining exposure to highly leveraged investment firms.