According to a report by Reuters on August 16, Jane Street, one of the most mysterious proprietary trading giants on Wall Street, suffered a loss of approximately $15 billion (about 101.1 billion yuan) in July 2026. This marked the first monthly loss for the company in over a decade.
According to The Wall Street Journal, the company's losses are mainly due to the forced liquidation of its AI hedge fund, Situational Awareness, as well as the significant fluctuations in its non-AI stock positions in Asia during that period.
Jianjie Capital was established in 2000 and earns its profits by trading a variety of financial products such as ETFs, stocks, bonds, options, commodities, and currencies on global exchanges and trading platforms.
The “Situational Awareness” fund, which caused its huge losses, was founded by Leopold Aschbrenner, a former researcher at OpenAI and known as a “genius in AI”. In the first half of the year, it achieved astonishing returns by investing in AI-related stocks, and its scale expanded rapidly.
However, the significant decline in AI stocks in July led to severe losses in the positions that the fund had established using high leverage, thereby triggering margin calls. On July 24, Aschbrenner continued to insist in a letter to investors that this was "one of the most attractive buying opportunities since early 2025."
But Aschenburg found it increasingly difficult to raise more funds. Before the market opened on July 30th, three major brokers—Bank of America, Goldman Sachs, and JPMorgan Chase—issued margin call notices. Due to failure to meet the required conditions, the fund was ultimately forced into liquidation procedures, and most of its stock portfolio was transferred to Citadel at a discounted price.
This matter had become a hot topic by the end of July. Recently, due to Jan Street needing to discuss other transactions with investors such as Pimco, the exact monthly losses were officially disclosed.
Jian Street Capital stated in an internal memo that due to the strong performance of the fund in the first half of the year, the company's investment shares have continuously increased. Now, most of the unrealized profits have been sold, "but the overall investment period remains profitable."
According to people familiar with the matter, even accounting for this loss in July, Jiance Capital’s net transaction revenue over the past year up to Friday still exceeded $40 billion.
In addition to the AI funds, Jianjie Capital's long positions in Asian non-AI stocks also suffered losses. These assets performed well in the second quarter, but after the market plummeted, several of the largest memory and semiconductor stocks fell by about 50%, turning a successful strategy into a source of loss quickly.
Rogue News reported in early August that several of the world's most renowned hedge funds were severely affected due to their holdings related to AI.
Over the past few years, Jane Street Capital has grown into a leading firm in the market-making sector. However, despite its dominance, it has not been spared from the impact of AI-driven trade closures. The losses in July forced it to reduce some of its most risky positions over the recent weeks.
The company memo states: “Although the trading capital has increased significantly this year, due to these losses occurring relatively recently, we have become more stringent in controlling risks in some areas of our business.”
Meanwhile, Jane Street Capital is advancing a debt restructuring worth approximately $14.6 billion, led by JPMorgan Chase, with institutions such as Pimco, Capital Group, and Fidelity involved. The core goal is to convert the previously public bonds and floating-rate loans into private debt, thereby reducing financial disclosure requirements and increasing financing flexibility.
