Situational Awareness bets $400M on chip startup Source Foundry

Situational Awareness bets $400M on chip startup Source Foundry

Mon, August 10, 2026 at 4:02 PM GMT+3 2 min read

• ASML +3.80%

Situational Awareness, the AI-focused hedge fund run by Leopold Aschenbrenner, invested $400 million earlier this week in Source Foundry, a private startup aiming to upend how chips are manufactured, according to The Wall Street Journal. The investment brings Situational Awareness's total stake in Source Foundry to $500 million.

Source Foundry was founded by Stanford University researchers Abdulmalik Obaid and Joe Burg. The startup has raised at least several hundred million dollars to date and was valued at $5 billion in a recent fundraising round, according to the Journal. Sequoia Capital previously backed the company.

Source Foundry's ambition is to build the next generation of machinery, tooling, and software for AI chip fabrication, taking direct aim at Dutch giant ASML Holding, the dominant supplier of extreme ultraviolet lithography systems that underpin advanced semiconductor production. ASML's machines can cost more than $400 million each. "If you trace the AI supply chain upstream, from models to chips to the machines that manufacture them, each layer becomes increasingly critical and constrained," Sequoia partner Stephanie Zhan said in a statement. "Source Foundry tackles the tightest bottleneck: tooling for semiconductor manufacturing, starting in lithography."

The investment comes weeks after Situational Awareness narrowly avoided collapse when lenders began issuing margin calls after a steep decline in its public technology holdings. The fund had used significant leverage and built its public portfolio around AI infrastructure companies that lost value. Its total assets dropped to around $10 billion from $45 billion at the start of July.

To stabilize the fund, Aschenbrenner arranged the sale of the bulk of its equity positions — among them stakes in memory chipmakers SK Hynix and Sandisk, AI cloud platform Nebius Group, and hydrogen power company Bloom Energy — to Ken Griffin's Citadel. Situational Awareness kept its private portfolio intact, among them its stake in Anthropic along with holdings in cloud computing firm Fluidstack and semiconductor startup MatX.

Situational Awareness was founded in 2024 by Aschenbrenner, a former OpenAI researcher. The fund pursues an unusual hybrid model, placing capital in pre-revenue private ventures alongside positions in public equities — a combination that the Journal noted is rare among investment funds. Earlier this year, the fund joined Lux Capital in anchoring an approximately $1 billion round for Physical Intelligence, a robotics AI startup, which the deal valued at $11.5 billion.