One of the hottest investment firms in artificial intelligence took a bailout to stay afloat on Thursday amid a precipitous drop in value for its investments.
Situational Awareness, a fast-growing hedge fund in San Francisco founded by 20-somethings that invested heavily in A.I., put out an emergency call for help to rivals in the past 36 hours, seeking to sell more than $10 billion of its stocks to shore up its plummeting portfolio, according to three people briefed on the call.
After a brief bidding war overnight, the hedge fund Citadel — founded by the billionaire Kenneth Griffin — agreed to step in with the needed cash, so long as it received a substantial discount on the investments. The deal was closed several hours ago, one of the people briefed said.
The move forestalled the immediate danger for Situational Awareness, but it has put many on Wall Street on edge. Several recent crises have begun with struggling hedge funds forced to unwind, and the markets have been jittery in recent days about falling stock prices for chipmakers and the like.
A spokesman for Situational Awareness did not immediately respond to a request for comment.
This is a developing story. Check back for updates.
