Jane Street, the ultra-profitable market maker that has quietly out-traded Wall Street's biggest banks for years, just hit its first losing month in about a decade — and AI is to blame.

The firm lost roughly $15 billion in July, according to Bloomberg and Reuters, via CNBC, after its stake in Situational Awareness — an AI-focused hedge fund run by 24-year-old former OpenAI researcher Leopold Aschenbrenner — went sideways in dramatic fashion, alongside sour bets in Asian equities.

From $45 Billion to Fire Sale

Situational Awareness had been on a tear, riding AI-stock momentum to a peak of $45 billion in assets earlier this year. When chip and AI names cratered in July, the fund faced margin calls and was forced to dump its leveraged positions — including battered names like SK Hynix and CoreWeave — to Ken Griffin's Citadel at a steep discount, according to reporting that cited the Wall Street Journal and Financial Times. The fund's holdings collapsed to roughly $10 billion. Citadel, on the other side of the trade, reportedly gained about 14% for the month.

Jane Street's own AI-adjacent semiconductor and memory-chip positions fell by roughly half in value during the selloff, effectively wiping out the firm's gains on Situational Awareness back to where it started the year.

Despite the hit, Jane Street is nowhere near trouble. The firm has generated more than $40 billion in net trading revenue year-to-date — already topping its own 2025 full-year record of $39.6 billion, a figure that dwarfed trading revenue at the likes of Goldman Sachs and JPMorgan, per Fortune's account of the internal disclosures.

"JULY WAS A BAD MONTH." — Jane Street partner Turner Batty, in a note to staff, adding the firm had "closed a significant portion of our risk" in the areas that lost money

Doubling Down on Debt, Not Retreat

The loss hasn't slowed Jane Street's expansion plans. Days before the July numbers surfaced, the firm priced a $14.6 billion bond deal led by JPMorgan, split into three tranches maturing in 2031, 2033 and 2036, with the longest-dated notes yielding 8.088%. Major buyers reportedly included Pimco, Capital Group and Fidelity. The offering is part of a broader overhaul of roughly $11 billion in debt, shifting obligations from floating-rate bank loans and public bonds into private credit — cash the firm says will fund technology infrastructure and trading capacity, according to Bloomberg's coverage of the pricing.

The episode lands as a warning shot for anyone treating AI-linked trading as a one-way bet: even a firm renowned for near-flawless risk management got burned exposing itself to a young fund's leveraged conviction. Whether the July stumble proves a one-off or the first crack in Wall Street's AI-fueled trading boom is the question investors — and Jane Street's own risk desks — will be watching into the fall.