Jane Street recorded roughly $15 billion of losses in July after its investment in the AI-focused hedge fund Situational Awareness fell sharply alongside positions exposed to the broader technology selloff.

The month became Jane Street's first negative trading-revenue period since 2016 and its worst monthly loss on record. The firm, founded in 2000 and headquartered in New York, built its business on quantitative short-horizon trading and ranks among the world's largest market makers in exchange-traded funds, which makes even a single losing month an unusual departure for an operation that has historically produced steady trading gains. Even so, the trading firm has generated more than $40 billion of revenue this year, already exceeding the $39.6 billion produced across all of 2025.

Jane Street executives linked part of the drawdown to Situational Awareness, the hedge fund run by former OpenAI researcher Leopold Aschenbrenner, whose 2024 essay of the same name on the pace of AI development made him a widely followed voice in the field. The firm's stake in the outside fund had risen rapidly during a strong first half before collapsing in July's AI-stock reversal.

Jane Street Stake Falls From Nearly $10B

Jane Street initially invested about $2.5 billion in Situational Awareness, an unusual allocation for a firm that primarily trades its own capital. Strong performance pushed the value of that position close to $10 billion earlier this year before July's losses reduced it to roughly $3 billion to $3.5 billion.

Situational Awareness itself lost about 67% during July after leveraged positions in AI-related companies moved sharply against the fund. Margin calls require a leveraged fund to post cash or securities as collateral when its holdings lose value, and meeting them can force sales into an already falling market. Those calls eventually forced Situational Awareness to unload most of its public-equity portfolio, with Citadel acquiring much of the roughly $16 billion book.

Jane Street also lost money on its own technology exposure and on long positions in Asian stocks. AI-linked memory and semiconductor shares were among the hardest hit, while short-duration options hedges provided limited protection because the decline unfolded gradually across the month rather than through a single sharp crash.

Jane Street Cuts Risk After Rare Trading Loss

The firm has since reduced several of the positions responsible for July's losses and has become more selective about deploying risk. Its trading revenue has fallen roughly 25% from the peak reached at the end of June, although short-horizon market-making strategies have continued to perform strongly.

The drawdown came as Jane Street was also restructuring its financing. A JPMorgan-led private debt transaction involving about $14.6 billion brought in lenders including Pimco while moving much of Jane Street's existing public debt into private markets, which carry fewer public disclosure obligations than registered bonds.

Jane Street's expansion beyond short-duration market making has included investments in private AI companies such as Anthropic and CoreWeave. Jane Street was also among the investors in Anthropic's $65 billion funding round earlier this year.

Jane Street Remains Deeply Embedded in Crypto Markets

The loss also lands while Jane Street remains one of the largest traditional trading firms operating around crypto-linked markets.

Its role as an authorized participant for major spot Bitcoin ETFs previously put the firm at the center of the debate over claims that Jane Street was influencing Bitcoin's recurring intraday selloffs. Public filings later showed Jane Street reducing its Bitcoin ETF exposure by the equivalent of about 10,800 BTC during the first quarter.

The firm is separately fighting allegations tied directly to crypto trading. Terraform Labs' wind-down estate claims Jane Street used private information surrounding UST liquidity before the stablecoin collapsed in 2022, with newly unsealed filings focusing on a private Telegram channel and roughly $192 million of UST sales. Jane Street has denied wrongdoing and moved to dismiss the case, which remains unresolved.

Despite July's $15 billion setback, Jane Street entered August with more than $40 billion of trading revenue generated so far in 2026.