Leopold Aschenbrenner's AI hedge fund, which nearly collapsed last month, has poured another $400 million into a secretive semiconductor startup — its biggest remaining bet after selling most of its public portfolio.

The investment, first reported by The Wall Street Journal and confirmed by TechCrunch this week, goes to Source Foundry, a startup founded by Stanford researchers that is trying to make chip manufacturing dramatically faster and cheaper. The new money brings Situational Awareness's total investment in Source Foundry to $500 million, after an initial $100 million stake.

Source Foundry is developing machines to manufacture cutting-edge AI chips and aims to challenge ASML's dominance in lithography equipment — the tools that currently bottleneck the world's chip supply. The startup is backed by Sequoia Capital.

"AI demand is growing on an exponential software curve, while semiconductor manufacturing capacity is growing on a linear industrial-equipment curve," Sequoia partner Stephanie Zhan said. "That widening mismatch is the chip wall. Source Foundry's vision is to start from different physics and build something dramatically simpler, cheaper, and faster to manufacture."

The bet comes days after Situational Awareness was thrown into turmoil: at the end of July it sold most of its public stocks to Ken Griffin's Citadel at a 10% discount as its AI infrastructure investments lost value and banks demanded more collateral. Its assets under management reportedly fell from $20 billion to $10 billion, though the fund held on to its Anthropic shares.

The move signals where Aschenbrenner — a former OpenAI researcher who launched the fund in 2024 — sees the next leverage point for AI: not models, but the machines that make the chips.

Sources