Elizabeth Holmes: How Theranos founder went from billionaire darling of Silicon Valley to the brink of prison
“Don’t worry about the future, we’re in good hands.”
So said former US president Bill Clinton in 2015, as he introduced Elizabeth Holmes to an adoring New York crowd.
It seemed an uncontroversial statement at the time, as he hailed the achievements of a woman who had become America’s youngest self-made female billionaire after taking Silicon Valley by storm.
A hub for the world’s biggest tech companies, the only thing more synonymous with this infamous stretch of northern California than scientific breakthroughs and innovative gadgets were the rich white men who were invariably behind them – turtleneck jumpers and smart trouser-sneaker combos in tow.
Bill Clinton and Elizabeth Holmes at the Clinton Global Initiative’s 2015 meeting in New York
Holmes – a high school computer whizz turned Harvard dropout – was a bona fide gatecrasher, her stunning rise to the cover of Forbes magazine powered by her founding health technology firm Theranos and its rapid ascent to a peak valuation of $9bn. Look back on what it was promising to deliver, and it’s easy to see why.
Revolutionary blood tests were at the heart of its pitch, ones which could be performed at phenomenal speed with merely a small drop required – and no needles.
Holmes’s catchphrase became “change the world”, such were her assertions that the equipment her company had developed could test for dozens of diseases in one fell swoop.
She insisted it would change healthcare in the US, not just by speeding up and streamlining trips to the doctor, but by eventually rendering such visits obsolete by selling the gizmos in stores.
It took more than a decade for such claims to be exposed as the stuff of science-fiction, but Holmes’s shameless willingness to talk the talk regardless helped her become one of the darlings of Silicon Valley, raising hundreds of millions from investors and venture capitalists.
As Theranos grew, her public image was crafted to perfection to make her the perfect face of one of America’s most exciting companies, famously adopting the aforementioned turtlenecks from her idol Steve Jobs, the late Apple founder, and speaking in a strikingly deep voice which added extra gravitas to her every word.
Fame isn’t for everyone, but for Holmes it seemed elementary.
Nothing, it seemed, could go wrong. Until it did. Big time.
Theranos reached a value of $9bn
How the lie was exposed
Holmes’s empire began to unravel upon the publication of a bombshell expose by The Wall Street Journal, which reported that Theranos’s technology was profoundly flawed.
The devices used to collect people’s blood, which the firm dubbed “nanotainers”, were said to be so far off the mark that Theranos had in fact been using other companies’ equipment to carry out blood tests in its laboratories.
The most distressing piece of the Journal’s report was that the company’s ex-chief scientist, Briton Ian Gibbons, had tried to take his own life after telling his wife the tech did not work. He died shortly after from liver failure.
The stories emerged just a month after Holmes had shared the stage with Bill Clinton.
Silicon Valley is home to some of the biggest names in tech
As described by Sky’s Ian King when Theranos went bust in 2018, three years after the Journal’s report, key to the company keeping the wool fixed firmly over the public’s eyes until then had been an almost cult-like culture among its executives and staff, and one of extreme secrecy.
Neither are unique to Silicon Valley – some of the big tech personalties who have emerged over the years remain an odd focus of worship in some corners of the internet – but rarely have they combined to such destructive effect.
The journalist who broke the story, John Carreyrou, has since written a book on the scandal called Bad Blood, which stands to be turned into a feature film. There’s perhaps a cruel irony that it’s being produced by Apple, the company whose late co-founder was a source of such inspiration for Holmes.
Her rise and fall also inspired a hit podcast series called The Dropout, and a subsequent Hulu series of the same name starring Amanda Seyfried.
The show presents Holmes as a brave, smart, single-minded young woman determined to succeed, and she is initially easy to root for. As Apple designer Ana Arriola tells Holmes in a scene when she attempts to recruit her following the launch of the first iPhone: “Honestly, it’s just really exciting to me that you’re a young female CEO, instead of a cocky little boy in a sweatshirt.”
But Holmes’s goal of becoming a wealthy star of the biotech scene quickly overcomes all other instincts – including a willingness to tell the truth.
It’s a trait that left some staff feeling deeply uneasy, not just Gibbons and Arriola, who describes her time at Theranos on her LinkedIn page as “altruism through corrupt unethical science-fiction”.
Amanda Seyfried as Holmes in The Dropout: Pic Disney+
How a life unravelled
Carreyrou’s revelations, which Holmes has admitted trying to silence, sparked investigations by medical and financial regulators in the US. In a development which would once have been unthinkable, the now 34-year-old was facing criminal charges in 2018.
She and the president of Theranos, ex-lover Romesh Balwani (who she has since accused of sexual assault), were accused of engaging “in a multi-million-dollar scheme to defraud investors, a separate scheme to defraud doctors and patients”, and each faced two counts of conspiracy to commit wire fraud and nine counts of wire fraud.
Former Theranos president Ramesh Balwani
Among those defrauded investors were the likes of Rupert Murdoch and the American pharmacy giant Walgreens, while similarly big names had been attracted to Theranos’s board of directors.
Among them were former secretaries of state Henry Kissinger and George Shultz, and an ex-director of the US Centers for Disease Control.
All of them had been hoodwinked by Holmes, who had founded Theranos aged just 18 and quickly learned how to tell her backers exactly what they wanted – and she needed them – to hear.
As Eric Jackson, a startup founder and author of The PayPal Wars, put it to Sky News: “There is almost endemic to the system a need to, I don’t want to say exaggerate, but to tell a narrative that’s compelling to investors. At a certain point hype does have to be in line with credibility, if not you’re in an instance of good old-fashioned fraud.”
Whether it was a matter of delusion, falling victim to the treacherous “fake it ’til you make it” culture that permeates American startups, or something more sinister, Holmes maintained during her trial that she initially believed her company’s purportedly revolutionary blood tests were real.
“I wanted to convey the impact the company could make for people and for health care,” she told the court of her meetings with investors.
To prosecutors, such assertions were the consequence of a woman who was “out of time and out of money”.
Having launched her company by repurposing family funds meant for her Harvard degree, taking it mainstream meant doing whatever it took to attract her big time investors and venture capitalists.
The once-enamoured former US secretary of defence Jim Mattis, who joined the company board, told the trial: “There just came a point when I didn’t know what to believe about Theranos any more.”
Holmes arrives for a hearing in San Jose in 2019
‘She chose lies when we needed truth’
Holmes’s sentencing on Friday comes after she was convicted of fraud earlier this year, her years-long scam having failed to move the jury as it had done her backers.
After a case which gripped the world, just as her rise to fame had done, US federal prosecutors want the judge to jail her for 15 years, a term considered appropriate for “one of the most substantial white collar offences Silicon Valley or any other district has seen”.
Balwani has been left waiting until next month for his sentencing, having also been convicted of multiple fraud counts during a separate trial.
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In a 46-page brief last week, assistant US attorney Robert S Leach wrote of Holmes: “She repeatedly chose lies, hype, and the prospect of billions of dollars over patient safety and fair dealing with investors.
“Elizabeth Holmes’ crimes were not failing, they were lying – lying in the most serious context, where everyone needed her to tell the truth.”
A counter document from Holmes’s attorneys, totalling 82 pages, insisted her reputation had been permanently and unfairly destroyed, given it had turned her into a “caricature to be mocked and vilified”.
They are appealing for a sentence of no more than 18 months.
More than 130 friends, family, former investors and employees have also submitted letters to the judge, Edward Davila of San Jose, California, to appeal for leniency.
Senator Cory Booker used his to hail Holmes, still only 38, as someone who “can, despite mistakes, make the world a better place”.
Whether that’s true or not, she won’t be able to from behind bars.
World
It’s a stunning shift in US policy – but Biden’s announcement will trigger fury and fresh threats from Moscow
Joe Biden’s belated decision to allow Ukraine to use US-supplied, long-range missiles inside Russia will be cheered by Kyiv and will almost certainly prompt the UK to follow suit.
But the stunning shift in US policy – just weeks before Donald Trump takes over as US president – will also trigger fury and fresh threats from Moscow at a time of increasing uncertainty about the future course of its war.
President Vladimir Putin has warned the West they would be playing with fire if they allowed Ukrainian forces to launch Western-supplied cruise and ballistic missiles at Russia, saying it could even trigger a global conflict.
British and US officials, though, have repeatedly advised their respective capitals not to be intimidated by Moscow’s sabre rattling.
Ukraine war latest: Biden lifts ban on Russia strikes
Yet there has been hesitancy, particularly in Washington, over the unleashing of US Army Tactical Missile System (ATACMS) ballistic missiles beyond the borders of Ukraine.
However, it seems that a move by North Korea to send thousands of its troops to fight with Russia has changed US calculations.
The New York Times, which was among the US media organisations to break news of the Biden administration’s decision on long-range missiles, reported that the first time the American weapons will be used inside Russia will likely be against Russian and North Korean troops battling a Ukrainian incursion in the Russian region of Kursk.
While a significant step up in support for Ukraine, the ability to use American long-range missiles inside Russia is not a war-winning development.
But it does expand Kyiv’s capacity to hit important military targets deliberately positioned by Russian commanders far back from the frontline. This includes stockpiles of missiles, drones and other ammunition used to strike Ukraine.
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Biden lifts ban on Russia strikes
Just as important as the military impact, though, is the political signal that the US decision sends to the Kremlin about Washington’s willingness to defy Russian warnings about dire consequences should Mr Biden dare to grant Ukraine the permission it’s so long been seeking.
The dramatic move by the United States comes after months of lobbying by Ukraine’s leader, Volodymyr Zelenskyy.
A key thing to watch now will be how Mr Putin reacts the first time an American missile kills Russian soldiers on Russian soil.
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The city where schools go underground
Moscow does not want a direct war with the United States and NATO – nuclear-armed forces with far greater combined firepower – but the Kremlin could well ramp up an already heightened campaign of sabotage and other forms of hybrid warfare across Europe.
Another important reaction to track will be how Mr Trump responds to Mr Biden’s move and whether he continues to allow Ukraine this permission once he takes over as the US commander-in-chief.
The president-elect has vowed to end Russia’s war in Ukraine quickly but he has not said how. Yet he has voiced fierce opposition to the continued gifting of vast quantities of American weapons to the Ukrainian military.
Several people have been killed after Russia launched its largest aerial attack on Ukraine since August.
More than 200 missiles and drones were deployed, Volodymyr Zelenskyy said, as he condemned a “massive combined strike” on “all regions”.
Andrii Sybiha, Ukraine’s foreign minister, said “peaceful cities” and “sleeping civilians” were targeted.
Moscow is focused on the “energy infrastructure throughout Ukraine” and is trying to intimidate Ukrainians with “cold and lack of light”, Mr Zelenskyy said.
The president added: “The whole world sees and knows that we are defending ourselves against absolute evil, which does not understand any language but force.
“We need unity [and] the world needs unity. Only together can we stop this evil.”
A firefighter at the site of a Russian drone strike in Mykolaiv in southern Ukraine. Pic: State Emergency Service of Ukraine/Reuters
Two people were killed and a 17-year-old boy was injured after a Russian attack in the Black Sea port of Odesa, regional governor Oleh Kiper said.
Energy infrastructure was damaged, he said, leading to “interruptions in the supply of heat, water and electricity”.
In Mykolaiv, southern Ukraine, officials said two people were killed in a Russian drone attack.
Ukraine’s state emergency service said a multi-storey building, cars and a shopping centre were hit.
Two women were killed and six injured, including two children, it added.
In the central Dnipro region, two people died and three were wounded in a strike on a rail depot, while in Lviv, on the border with Poland, a woman was killed in a car.
Emergency services remove part of a Russian missile from an apartment building in Kyiv. Pic: Reuters
In the capital, Kyiv, mayor Vitali Klitschko said Russian attacks had caused a fire to erupt on the roof of a residential building, injuring at least two people.
People took refuge in metro stations, while emergency services were pictured removing part of a Russian missile from an apartment block.
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The Ukrainian military said it had destroyed 102 missiles and 42 drones launched by Russia.
Hypersonic missiles were among the 120 fired at Ukrainian territory, it said.
Air defences were active in “almost all” regions of Ukraine.
Equipment at thermal power stations has been “seriously damaged” during Russian air strikes, Ukraine’s largest private energy provider said. DTEK said its staff were working on repairs.
People sheltering in a metro station in Kyiv. Pic: Reuters
Read more:
Schools go underground to keep life as normal as possible
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Russia’s defence ministry confirmed it had attacked energy resources supporting Ukraine’s military-industrial complex, Russian news agencies reported.
Poland scrambled its air force early on Sunday because of the “massive attack by the Russian Federation using cruise missiles, ballistic missiles and unmanned aerial vehicles”.
Mr Zelenskyy sent his condolences to anyone affected by the latest Russian attacks.
He said “all necessary forces” were involved in restoring power and facilities.
On Tuesday, it will be 1,000 days since Russia launched what it calls its “special military operation”.
World
Under siege in Ukraine, schools go underground to keep life as normal as possible for children
If you know a teacher, or you are a teacher, you’ll understand that many in the profession consider their jobs one of the best in the world, while also acknowledging it can be one of the most stressful.
Teaching in a war zone takes it to another level on both fronts.
But imagine teaching in a war zone in say the London Underground or the Paris or New York metros?
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Well, that’s exactly what is happening in Kharkiv, Ukraine’s second largest city – a city attacked by Russia on a constant basis.
In 2023, the authorities banned children from being taught in regular school buildings here because of the threat they were under from missile strikes.
So Kharkiv city and its education department started working on a plan.
That plan has concluded with the construction of six schools in six metro stations, teaching 4,800 children daily whose families haven’t fled the war.
Intrigued by this new educational experiment, as it’s still considered, we were told to meet at the University metro station in the centre of the city and wait to be taken to the school.
Soviet-era metro stations, and particularly the platforms, are universally grand and ornate, although Ukraine’s are slightly more modest.
A young child at his desk in the underground school
The school (left) and the metro system (right)
Pedestrian walkways though are always crammed with florists, newspaper stands, mobile phone shops and cafes, and Kharkiv’s are no different.
What is different though is that next to the main platform entrance, an adjacent passageway has been sealed off by a white wall with three doors built into it.
We were ushered inside, past a guard and into a concourse with two desks.
Inside the classrooms in a city under siege
The classrooms are brightly decorated to try and maintain morale for the children
In front of us, we could see a wide staircase leading to a long corridor. Above us, large, shiny silver metal tubes stretched into the distance, pumping in air from above ground.
Lining the corridor, we could see a series of white interconnecting cabins, all brightly lit, and from them, we could hear the sounds of children laughing, music, and teachers conducting class in this strange subterranean school.
Perhaps the only school in the world with one corridor.
A door to one of the classes opened, and in pairs, a class of six and seven-year-olds emerged – their teacher at the front and an assistant at the rear.
They’re heading to the bathroom for a toilet break, the staff must keep an eye on them.
If any of the children were to make it out of the school, they could easily get lost in the underground system.
The pupils are spread across seven classrooms with a mix of yellow and green desks and chairs, and walls decorated with bright pictures like rainbows, sunshine and sunflowers, to try to create a cheery atmosphere.
“At first, the children were bewildered by studying here, it felt unfamiliar to them, but interacting with each other and with their teachers helped them to adapt,” Iryna Tarasenko from Kharkiv’s education department told me.
Iryna Tarasenko from Kharkiv’s education department
Sky News’ Stuart Ramsay and Kharkiv education official Iryna Tarasenko
Iryna is showing me around the school. They feel it’s their way of contributing to the war effort.
She said: “In the summer of 2023, the Defence Council didn’t permit children to study in regular school buildings, so, we had to find a solution. This is our frontline – our educational frontline.”
There are of course health concerns for both the teachers and the pupils spending so much time underground, so medical examinations are done on a regular basis.
It is an opportunity for doctors and behavioural specialists to monitor the effects of this war on them.
Dmytro Mitelyov is the neurologist on duty monitoring the children’s behaviour, checking for any signs of stress – physical and mental.
He gently asks each child how they’re feeling, and asks if they have any aches and pains.
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Neurologist Dmytro Mitelyov (centre) monitors children as they spend large parts of their days underground
“These are children who haven’t left Kharkiv since the war began, they live in a constant state of stress, multifaceted stress caused by a range of factors. They are exposed to things they see and hear, like alarms, explosions, and they feel it all,” Dmytro told me.
“When these children grow older, all the trauma they’ve endured during their formative years can, unfortunately, leave a lasting and serious imprint on their mental health. They haven’t had a healthy, carefree childhood – the kind where they can learn, play, and feel safe as children normally would.”
As the first group’s school day ends, children from one of Kharkiv’s most bombed districts, wrap up warm before being led to the surface to catch a school bus to their old school – which was hit by a missile.
It’s still where they meet their parents for normal pick-up.
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Students eating in their classrooms in Kharkiv’s metro system
We jump on the bus with them for the journey past destroyed government buildings, shopping centres and restaurants.
When the air raid suddenly sounds, I look around to see how the children and teachers on this bus will react.
They barely flinch it’s so common.
“People have, to some extent, adapted,” one of the headmistresses, Olena Nikolienko, said.
“If we see missiles coming, heaven forbid, we’ll stop near a designated shelter, following our evacuation plan, and that’s where the children will go for cover.”
Headmistress Olena Nikolienko
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Remember, these children are safe underground at school, up here they are not.
During the bus ride, 10-year-old Alisa began quietly sobbing. Her teacher told me her grandfather was killed four months ago on the frontline, and since then she has been prone to tears.
Alisa’s teacher comforted her and told her everything would be ok.
It feels like everyone here has to carry their own sadness.
Everyone.
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Parents, standing in the first snowfall of the season, greet the children as they get off the bus.
The kids run off the bus, and start throwing snowballs at each other, enjoying this precious moment.
It will be the last time they’re outside today.
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