Citrini Comments on "AI Stock God Seeking New Funding": The Fund's Founding LPs Still Have a 130% Return Rate, Likely to Buy the Dip; The Fund Will Secure Sufficient Capital and Unwind Hedges to Avoid Liquidation

Odaily reported that in response to the recent news of "AI stock god Leopold Aschenbrenner's Situational Awareness fund seeking new funding support," well-known investment research institution Citrini officially posted on X platform: "If you are an LP of Situational Awareness, you invested in this fund based on the pitch stating that 'AI is the only thing that matters. If you recognize this, and want to invest in a vehicle that expresses this view by going all-in long on the most leveraged bet of our most optimistic AI thesis in the stock market, then invest.' Not just because you're bullish on AI, but because you believe Leopold is one of the few 'hundreds of people' / knows those 'hundreds' who will bring about the machine god before 2030. Then over the next two years, the fund did exactly what it promised. And it went up. Roughly over twenty times, if I recall correctly.

Again, in this scenario, you are the person who read 'Situational Awareness' (that paper) and said, 'Yes, I agree AI is more powerful than the atomic bomb and will turn the world upside down before the end of this decade. And I want to put my investment into the hedge fund version of that view.' Now those stocks have fallen, so the fund's assets have fallen too.

Let me ask you—do these LPs look like people who would turn bearish on AI just because SK Hynix halved in six weeks? People who likely view the level of tech optimism expressed by 'I want to go long TQQQ' as something normal people consider investing in municipal bond funds?

Yeah... I wouldn't expect many of them to be on the phone complaining to Mr. Ash Burner right now. Some don't realize how insane a 2200% gain since inception (2024) is. To put it in perspective, if you had invested $100 million when SALP was launched and lost ninety percent (of the gains) in July, your investment would still be worth $230 million today.

I think LPs are likely to buy the dip. Situational Awareness will get the money they need. And once the funds arrive, they will unwind their (likely short-dated) hedges because they won't face the risk of being liquidated by their prime broker. This means the market makers who sold them those hedges will have to cover their delta hedges on what is likely a very significant notional exposure. At the same time, they will deploy that capital into what they see as 'the best buying opportunity since April 2025.' I don't think Leopold is in trouble; rather, he is likely to raise the capital he needs. This means Leopold is now more likely to trigger a market bottom than to cause AI stocks to continue falling.

If there's something I'm missing that would cause this group of AI super believers—who likely still have significant profits on their SALP investment—to decide they'd rather not buy the dip, then yes, every stock that even slightly smells of AI could head straight to hell. But... (that's not the reality)."