One of the hottest hedge funds in artificial intelligence received a bailout to stay afloat on Thursday amid a sudden drop in value for its investments.

The fast-moving crisis unfolded over just 36 hours at Situational Awareness, a once-envied investment firm in San Francisco led by 20-somethings, including a former employee of OpenAI. The firm put out an emergency call for help to rivals, seeking to sell more than $10 billion of its stock to shore up its plummeting portfolio, according to three people briefed on the call.

After a brief bidding war overnight, the hedge fund Citadel — founded by the billionaire Kenneth Griffin — agreed to step in with the needed cash, so long as it received a substantial discount on the investments, the three people said.

The move forestalled the immediate danger for Situational Awareness, but it has put many on Wall Street on edge. Several recent crises have begun with struggling hedge funds forced to unwind — most recently in 2021, when the collapse of the hedge fund Archegos ended up taking down the bank Credit Suisse along with it.

Situational Awareness was named after a 2024 essay by its founder, Leopold Aschenbrenner, a onetime employee of the philanthropic arm of FTX, the fallen crypto brokerage. His essay predicted that research labs would develop a superintelligent form of A.I. by 2027.

That thesis became a foundation of the firm’s investment strategy, and it began pouring money into A.I. companies. This worked wonderfully, for a while: Some of its investors, which include Patrick and John Collison, the founders of Stripe, had made a 200 percent return this year alone, according to two people briefed on the figures but not permitted to discuss them publicly.

The fund grew to tens of billions of dollars under management, and became a poster child for the boom. It hired a public relations firm, attracting attention from media old and new. One famous podcaster, Tim Ferriss, called Mr. Aschenbrenner the “Nostradamus of A.I.”

His fortune changed quickly. In recent weeks, markets have begun to question whether the A.I. renaissance will turn out to be as profitable or impactful as promised. Stocks for chipmakers and other firms closely tied to the industry cratered.

That hit Situational Awareness on two fronts at the same time, according to two of the people briefed. Its holdings in companies such as SK Hynix, a South Korean semiconductor maker, rapidly lost value, while so-called shorts, or bets, against older software companies suddenly turned in the other direction.

Plenty of A.I. companies and investors large and small are in a crunch. But Situational Awareness was in a particularly dangerous position. It had borrowed billions of dollars from Wall Street banks to amplify its bets, and those banks had in recent days begun asking for some of that money back, according to the three people briefed on the requests.

Faced with the potential of a forced fire sale, Mr. Aschenbrenner canvassed his onetime rivals for a bailout. His offer: to sell more than $10 billion of its stocks to shore up the firm.

Wall Street banks and other investment firms worked overnight to scour the firm’s portfolio to come up with bids. An auction was held overnight Wednesday and the winner was Mr. Griffin’s hedge fund, Citadel. The deal was closed early Thursday, one of the people briefed said.

It’s a familiar strategy for Citadel, one of the largest hedge funds in the world. In decades past, it has swooped in to buy cut-rate positions from firms in desperate situations, including Enron. It beat out other bidders including Millennium Management, another huge hedge fund, which did not want to pay as high a price for what it viewed as risky investments, one of the people briefed said.

The spotlight on Situational Awareness is sure to continue. It still holds a big chunk of harder-to-sell positions in privately held companies such as Anthropic. It remains to be seen if those companies will live up to their lofty valuations if and when they hit the public markets.

Mr. Aschenbrenner and a spokesman for Situational Awareness did not respond to requests for comment.

Eli Tan contributed reporting.