Jane Street, a top quantitative trading firm long celebrated for record profits, posted roughly $15 billion in losses in July 2026—its first down month in about a decade and its worst ever—largely from AI-related positions.
Jane Street ranks among Wall Street’s most profitable trading powerhouses. The secretive proprietary firm and market-maker generated a record $39.6 billion in trading revenue in 2025 (surpassing major banks like JPMorgan) and more than $40 billion year-to-date through July 2026, driven by quantitative strategies, ETFs, options, and volatility.
What went wrong was concentrated exposure to the AI trade. Jane Street held a large stake in Situational Awareness, the AI-focused hedge fund run by former OpenAI researcher Leopold Aschenbrenner. That fund (and Jane Street’s own AI/semiconductor/memory stock positions) soared earlier in 2026 but suffered a sharp reversal in July amid an AI stock selloff—some chips and related names dropped around 50%. The fund faced margin pressure and conducted a fire sale of holdings (partly to Citadel).
Jane Street also took hits from related risk reductions and some Asian equity bets. Internal notes called July a “bad month” tied to the same trades that outperformed in Q2.
AI market moves—not AI systems themselves making decisions—drove the drawdown. Despite the rare setback, the firm’s overall 2026 results remain exceptionally strong, underscoring both its scale and the risks of concentrated tech bets.