Jane Street lost $15 billion in its first down month in a decade

Jane Street, the market maker, reported a staggering $15 billion loss in July, marking its first monthly decline in nearly a decade. The sharp downturn was attributed to the decline of AI-focused hedge fund Situational Awareness, which in turn caused a drop in asset prices across equity markets. Jane Street, known for its significant investments in Situational Awareness and AI ventures, suffered due to wrong bets in Asian equity markets and the hedge fund's predicament.

According to an insider, the company's July losses were a rare and severe downturn. Despite the heavy losses, Jane Street has generated over $40 billion in net trading revenue this year, surpassing its 2025 record. The company's partner, Turner Batty, noted that they have become more cautious with their risk-taking following the July losses.

Jane Street was navigating through this financial turmoil as it prepared to refinance billions of dollars of debt. The market maker's early investment in AI's biggest players like Anthropic and CoreWeave added to its profits, but the situation took a turn for the worse in July. The firm's investment in Situational Awareness fell flat, leading to a significant drop in its stake for the year. However, Jane Street still sees positive returns on this investment over the life of the bet.