JPMorgan Chase (NYSE: JPM) has cut off lending to Situational Awareness, the artificial-intelligence-focused hedge fund run by Leopold Aschenbrenner, after the fund suffered heavy losses on AI-related bets, the Financial Times reported on 11 September 2026.
The fund lost roughly 67% of its assets in July 2026, according to Investing.com, ending the month still up 80% for the year despite the collapse.
What JPMorgan did
A source told Reuters that JPMorgan had cut off lending activity for Situational Awareness following the losses. Goldman Sachs, Citigroup and Bank of America remain active brokers to the fund, the same source said.
Situational Awareness, founded by the 24-year-old former OpenAI researcher, had been one of the more closely watched vehicles trading the AI boom before its reversal. Its assets fell to roughly $10bn after the July liquidations, Bloomberg has reported, down from a peak near $45bn cited by CNBC’s coverage of the fund’s fire sale.
From bearish bets to a leveraged long book
Regulatory filings tracked by the research outlet TECHi show how sharply the fund’s positioning shifted. In the first quarter of 2026, 61.9% of its disclosed value sat in bearish put options against chip-sector names including the VanEck semiconductor ETF, Nvidia, Oracle, Broadcom and AMD. By the second quarter, the fund’s $20.2bn book was 99.6% long across 26 positions.
That reversal preceded the July collapse, when the fund sold the bulk of its public-market positions to Citadel as losses mounted, Investing.com reported. The Securities and Exchange Commission has since subpoenaed JPMorgan, Goldman Sachs, Citigroup and Bank of America over the fund’s leverage, margin calls and dealings with Situational Awareness LP, according to TechTimes, which cited earlier reporting that the probe examines the timing of margin calls and the banks’ overlapping roles as lenders and counterparties.
Limited read-through for JPMorgan’s own shares
The episode has left little mark on JPMorgan’s own stock. Shares closed at $356.60 on 11 September, up just 0.01% on the day and 1.25% over 20 trading days, within a 20-day range of $351.12 to $362.60. Short interest, measured by FINRA’s daily ratio, has fallen from 0.562 on 8 September to 0.388 on 11 September, pointing to reduced bearish positioning rather than a build-up of it as the story emerged.
That muted reaction sits against a bank with a large capital base relative to any single prime-brokerage relationship. JPMorgan’s quarterly net income has ranged from $12.9bn to $21.2bn over the past three years, according to its 10-Q filings. The bank reported net income of $16.49bn for the first quarter of 2026 and $21.16bn for the second quarter, up from $14.64bn and $14.99bn in the equivalent quarters of 2025. Diluted earnings per share rose alongside, from $5.07 in the first quarter of 2025 to $5.94 a year later, and from $5.24 to $7.70 over the same second-quarter comparison. Against that scale, a single hedge-fund relationship carries limited weight on the bank’s own results.
The broader market backdrop has also shifted since the fund’s July unwind. The 10-year US Treasury yield stood at 4.95% on 10 September, up from 4.83%, while the 2-year yield rose to 4.56% from 4.43%, narrowing the 10-year/2-year spread to 0.33 percentage points from 0.39, according to Federal Reserve Bank of St Louis data. US CPI edged up to 334.131 in August from 332.813 the prior month, with unemployment holding at 4.1%, the same series show. None of those moves has been tied directly to the Situational Awareness episode, but they frame the rate environment in which the fund’s leveraged AI bets were unwound.
What happens next
The SEC’s inquiry into the four banks’ margin-call timing and leverage arrangements with the fund remains open, TechTimes reported, citing earlier reporting on the subpoenas issued in late August. Whether other lenders follow JPMorgan in stepping back from Situational Awareness, or whether Goldman Sachs, Citigroup and Bank of America continue as its brokers, is likely to be the next marker for a story that has so far had little visible effect on JPMorgan’s own share price or funding costs.
This article is for information only and is not investment advice or a recommendation to buy or sell any asset. Markets move quickly; figures are correct as sourced at the time of writing. Always do your own research before making financial decisions.
