Jane Street posted roughly $15 billion of losses in July — its first monthly slump in about a decade — as AI-focused hedge fund Situational Awareness swooned and dragged down asset prices across equity markets, according to a person familiar with the matter.
Jane Street, which invests in Situational Awareness and directly invests in AI ventures, suffered a rare and severe downturn amid volatile stock markets. The company’s investment in the hedge fund, as well as wrong-way bets in Asian equity markets, drove part of the losses, said the person, who asked not to be identified citing private details.
“July was a bad month,” Turner Batty, a Jane Street partner, said in an internal note.
Still, the firm has generated more than $40 billion of net trading revenue so far this year, more than it did in all of 2025 when it set a Wall Street record, the person said.
“Despite the large year-to-date increase in trading capital, the recency of these losses has caused us to locally be more selective about risk,” Batty said. “We’ve closed a significant portion of our risk in the specific areas we lost on in July, and have also reduced risk-taking in other strategies.”
The market maker described the impact of the debacle at Situational Awareness while seeking to refinance billions of dollars of debt, according to the Financial Times, which earlier reported the loss.
Jane Street was rattled by Situational Awareness and the equity market turmoil as it was preparing to issue $14.6 billion of bonds this week to overhaul its debt load. It’s a stumble for the market maker that invested early in some of AI’s biggest players, including Anthropic PBC and CoreWeave Inc., adding to profits from its business handling thousands of trades within milliseconds.
In July, Situational Awareness faced margin calls after AI bets soured, leading the hedge fund to strike a deal with Ken Griffin’s Citadel to offload a big chunk of its public equity book. While the last-minute transaction helped the fund recover, the initial stumble led to a dwindling of assets.
Jane Street said Situational Awareness’ drawdown left its stake flat on the year, but noted that the investment is still up over the life of the bet.
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Jane Street has been setting record after record in recent years, including $39.6 billion of trading revenue for 2025. While the figure includes gains on long-term investments as well as the work handling trades, it surpassed Wall Street peers including Goldman Sachs Group Inc. and JPMorgan Chase & Co.
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In Jane Street’s latest debt deal, investors including Pacific Investment Management Co., Capital Group and Fidelity bought in, which was issued across three bonds, filings show. The refinancing allowed the market maker to fund technology infrastructure and expand its trading strategies, Bloomberg previously reported.
The new fixed-rate deal, led by JPMorgan Chase & Co., is part of Jane Street’s plan to repay its floating-rate loans and revamp its $11 billion capital stack.
Batty said in the internal note that the desks have reduced exposures in strategies that contributed to volatility.
“Our positions currently seem appropriate for our present risk tolerance,” he said. “Market volumes have been strong, and we’ve continued to make improvements to our short time horizon strategies, that trading seems more profitable than ever.”
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