On August 25th, according to The New York Times, the U.S. Securities and Exchange Commission (SEC) is investigating the recent near-collapse of the AI hedge fund Situational Awareness and has issued subpoenas to major Wall Street banks involved in trading the fund and providing leverage. According to sources familiar with the matter, the SEC has requested that banks provide information on the fund's trading timelines and communications with lenders regarding fund borrowing, and has demanded the preservation of all materials related to the fund. Founded by Leopold Aschenbrenner, a former researcher at OpenAI, Situational Awareness once achieved significant returns by riding the AI boom. At its peak, the fund managed over $30 billion in assets and borrowed tens of billions of dollars to amplify its investments. However, late last month, as shares of popular AI companies fell and traditional tech stocks it had shorted rose, the fund's losses rapidly expanded, ultimately forcing it to conduct a 'fire sale' liquidation and sell the majority of its stock portfolio at a discount to Citadel. The SEC stated that the investigation is still in its early stages and does not necessarily imply that penalties will be imposed. Situational Awareness has not been accused of any wrongdoing. The fund stated that it will "fully cooperate with any regulatory requests."