Situational Awareness Pitches Investors on Fluidstack Fundraise

Situational Awareness is raising money from its investors to plow into neocloud startup Fluidstack Ltd., just three months after highly levered bets on artificial intelligence firms nearly led to the hedge fund’s implosion.

Leopold Aschenbrenner’s fund is pitching clients to invest alongside it in a fundraising round that would value Fluidstack at $40 billion, according to a person familiar with the matter. That’s roughly double the valuation the startup fetched mere months ago.

Co-investments let clients put money into specific deals alongside a firm rather than inside their fund. Other investors have also received invitations to participate in the same Fluidstack funding round, according to separate people familiar with the matter, all of whom asked not to be named discussing the private fundraise.

A representative for Situational Awareness declined to comment. A Fluidstack co-founder disputed the reporting, without providing further information.

The fundraising comes just months after Situational Awareness nearly folded as its public tech investments plummeted, sparking margin calls from banks. The firm at one point weighed selling some of its private stakes — which include buzzy names like Anthropic and MatX in addition to an existing bet on Fluidstack — in order to stay afloat.

Ultimately, Aschenbrenner’s firm agreed to sell the bulk of its public stock portfolio to Ken Griffin’s Citadel at a discount. The deal came together in just 24 hours, and Aschenbrenner invested $500 million in the semiconductor manufacturing startup Source Foundry within weeks.

Neocloud Growth

Launched in 2017, Fluidstack has grown from a little-known startup to a company tied to major AI players — and one that has made major pivots. It previously announced plans to build a “supercomputer” in France, only to pull out of a marquee French data center project to focus on the US.

Fluidstack is raising money in the face of increasing investor concern over the financing and growth prospects for neoclouds, a relatively new class of companies that run intensive AI computing processes for big tech firms.

Investors have been scrutinizing the debt that neoclouds have taken on to fund their breakneck growth, with rising rates increasing their costs of financing. The companies expanded with the help of backstops and financial support from tech firms and chipmakers.

Shares of CoreWeave Inc., the industry’s most prominent neocloud, plunged last week, and its debt tumbled to levels that signal distress.

Anthropic PBC has committed to a $50 billion push to build US AI data centers with Fluidstack, including sites in New York and Texas. Google has also provided billions of dollars of financial backstops for data center projects tied to Fluidstack, helping them secure debt financing as Google pushes broader adoption of its AI chips.

Fluidstack has said it raised $830 million in a January fundraising round that was led by Situational Awareness and valued the startup at $7.5 billion. The company more than doubled its valuation months later in an additional round.

“As we stand at the event horizon of the singularity, humanity’s best chance is if democracies, with error correcting institutions, free speech, and checks on power, imbue those same principles into superintelligence,” Fluidstack said in July. “Whoever deploys frontier compute infrastructure fastest will decide whether Al expands human freedom or shrinks it.”