Going Infinite: The Rise and Fall of a New Tycoon

Going Infinite: The Rise and Fall of a New Tycoon

Michael Lewis

3.82(30304 readers)
From the #1 best-selling author of The Big Short and Flash Boys, the story of FTX’s spectacular collapse and the enigmatic founder at its center.

When Michael Lewis first met him, Sam Bankman-Fried was the world’s youngest billionaire and crypto’s Gatsby. CEOs, celebrities, and leaders of small countries all vied for his time and cash after he catapulted, practically overnight, onto the Forbes billionaire list. Who was this rumpled guy in cargo shorts and limp white socks, whose eyes twitched across Zoom meetings as he played video games on the side?

In Going Infinite Lewis sets out to answer this question, taking readers into the mind of Bankman-Fried, whose rise and fall offers an education in high-frequency trading, cryptocurrencies, philanthropy, bankruptcy, and the justice system. Both psychological portrait and financial roller-coaster ride, Going Infinite is Michael Lewis at the top of his game, tracing the mind-bending trajectory of a character who never liked the rules and was allowed to live by his own―until it all came undone.

Publisher

W. W. Norton & Company

Publication Date

10/3/2023

ISBN

9781324074335

Pages

272

Categories

Business

About the Author

Michael Lewis

Michael Lewis

Michael Monroe Lewis is an American author and financial journalist. He has also been a contributing editor to Vanity Fair since 2009, writing mostly on business, finance, and economics. He is known for his nonfiction work, particularly his coverage of financial crises and behavioral finance.
Lewis was born in New Orleans and attended Princeton University, from which he graduated with a degree in art history. After attending the London School of Economics, he began a career on Wall Street during the 1980s as a bond salesman at Salomon Brothers. The experience prompted him to write his first book, Liar's Poker (1989). Fourteen years later, Lewis wrote Moneyball: The Art of Winning an Unfair Game (2003), in which he investigated the success of Billy Beane and the Oakland Athletics. His 2006 book The Blind Side: Evolution of a Game was his first to be adapted into a film, The Blind Side (2009). In 2010, he released The Big Short: Inside the Doomsday Machine. The film adaptation of Moneyball was released in 2011, followed by The Big Short in 2015.
Lewis's books have won two Los Angeles Times Book Prizes and several have reached number one on the New York Times Bestsellers Lists, including his most recent book, Going Infinite (2023).

Questions & Answers

The book explores the tension between Sam Bankman-Fried's altruistic goals and his financial practices by highlighting his contradictory behaviors. He aimed to address existential risks like AI and pandemics, yet his primary source of wealth came from risky crypto trading, including the collapse of FTX. His approach to managing FTX and Alameda Research, characterized by opacity and a lack of proper risk management, contradicted his altruistic goals. The book shows how his focus on maximizing returns for his own ventures, often at the expense of transparency and customer trust, ultimately undermined his altruistic mission. The collapse of FTX, with its loss of billions in customer funds, exemplifies this tension, as it was driven by risky practices and a lack of oversight, which clashed with his stated intentions to use wealth for the greater good.

The concept of effective altruism significantly influenced Sam Bankman-Fried's approach to business, investing, and personal life. He believed in maximizing the utility of his actions to benefit humanity, leading him to focus on ventures that could potentially save lives, such as investing in AI and pandemic prevention. This philosophy also guided his investing decisions, as he prioritized investments with the potential to maximize impact over traditional financial returns. In personal life, Sam's altruistic beliefs led him to adopt a vegan diet and donate substantial amounts to effective altruist causes. However, the implications of this philosophy in the context of his financial ventures were complex. His focus on maximizing impact sometimes led to unconventional decisions, such as investing in risky ventures without proper due diligence, which contributed to the eventual collapse of FTX.

Sam Bankman-Fried's approach to running FTX and Alameda Research offers several lessons on leadership and management:

  1. Decision-Making: Sam's decision-making was heavily based on expected value calculations, often leading to unconventional choices. This approach can be effective in certain contexts but can also be risky and difficult for others to understand or follow.

  2. Communication: Sam was known for his lack of clear communication and his tendency to avoid confrontation. This style can lead to misunderstandings and frustration among employees and stakeholders.

  3. Employee Relations: Sam's management style was hands-off, with a focus on results over relationships. This approach can foster a high-performing environment but can also lead to employee burnout and dissatisfaction.

  4. Risk Management: Sam's risk management was often questioned, particularly regarding the blending of Alameda and FTX operations and the lack of transparency in financials.

  5. Conflict Resolution: Sam's ability to navigate conflicts, such as the disputes with Alameda's management team, was complex and often involved shifting probabilities and expectations.

In summary, Sam's leadership style emphasizes results and efficiency but can lack in transparency, communication, and empathy, leading to challenges in employee relations and long-term sustainability.

The book examines the ethical implications of high-frequency trading, cryptocurrency, and the rise of tech giants like FTX through the lens of Sam Bankman-Fried's life and the FTX collapse. It highlights several key ethical issues:

  1. Lack of Transparency: FTX's operations, particularly the relationship between FTX and Alameda Research, were opaque, leading to potential misuse of customer funds and lack of accountability.
  2. Risk Management: The book questions the effectiveness of risk management in high-frequency trading and cryptocurrency, especially when large amounts of capital are involved without proper controls.
  3. Impact on Customers: The collapse of FTX resulted in significant financial losses for customers, raising questions about the responsibility of tech giants towards their users.
  4. Regulatory Oversight: The book underscores the challenges in regulating the crypto industry, particularly in terms of licensing and oversight.

Lessons for the future include:

  • Enhanced Transparency: Companies should be more transparent about their operations, especially when handling large sums of money.
  • Robust Risk Management: Effective risk management is crucial, especially in high-risk industries like cryptocurrency.
  • Customer Protection: Prioritizing customer protection and ensuring their funds are secure should be a top priority.
  • Improved Regulation: Governments and regulatory bodies need to adapt to the evolving nature of the crypto industry and implement effective oversight.

Sam Bankman-Fried's actions, particularly the collapse of FTX, had significant broader consequences for the crypto market, the global financial system, and society:

  1. Crypto Market: The FTX collapse exposed vulnerabilities in the crypto market, leading to a loss of trust and a subsequent market crash. It highlighted the risks of unregulated exchanges and the potential for fraud, causing many to reconsider their investments in cryptocurrencies.

  2. Global Financial System: The crisis underscored the interconnectedness of the global financial system. The collapse of FTX and its associated entities affected not just crypto markets but also traditional financial institutions, including banks that lent to crypto firms. It also highlighted the need for better regulation and oversight of the crypto industry.

  3. Society at Large: The FTX collapse had wide-ranging societal impacts. It led to job losses, financial losses for investors, and a loss of confidence in the crypto industry. Additionally, the collapse raised questions about the role of effective altruism and the ethical implications of using charitable funds for personal gain. The case also highlighted the importance of transparency and accountability in business.

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