Jim Cramer said Thursday the forced unwinding of levered hedge-fund bets on artificial intelligence stocks may help stabilize the wobbly AI trade. Cramer’s comments on CNBC came before the opening bell and shortly after his colleague David Faber’s initial report that prime brokers for Situational Awareness — the buzzy AI-focused hedge fund founded by former OpenAI researcher Leopold Aschenbrenner — were looking to find buyers for some of the firm’s holdings. “I have always believed that when you clear out the people who have to sell, like this gentleman, you get a bottom,” Cramer said on “Squawk on the Street,” as he discussed the developing story with his co-hosts. After the market opened, Faber updated his reporting and said that Situational Awareness’s entire book of public investments had been sold after suffering steep losses in recent weeks on its AI trades. Situational Awareness is known for being bullish on AI infrastructure providers, such as memory-chip maker Micron and neocloud CoreWeave , while also betting against companies with perceived AI disruption risk like software providers. Aschenbrenner and his fund attracted a cult-like following on social media this year thanks to eye-popping returns, with some retail traders looking to mirror his trades. Aschenbrenner’s hedge fund had amplified bets with borrowed money, known as trading on margin, according to Faber. This can lead to greater returns when the trades are going to plan, but it can also magnify the losses when things turn against the fund and lead to forced selling. In recent weeks, many of the market’s hottest AI stocks have been crushed, just as beaten-up software stocks have rebounded. Shares of Micron entered Thursday down 39% from their June 25 record close. Adobe , a posterchild of the “SaaSpocalypse” in software, soared 36% over the same stretch. Their fates are reversing in early trading Thursday, with Micron surging higher and Adobe selling off. Situation Awareness is far from the only investment shop to embrace the “long AI hardware, short software” thematic, Cramer noted. That means the implications of Thursday’s sales stretch beyond just a single hedge fund. “This is a clearing event … because he’s not the only one,” Cramer said. “There are so many people margined in these same stocks that … this has been, historically, how you reach a bottom.”