Sam Bankman-Fried lobbied for Taylor Swift deal as FTX bled cash and execs urged restraint
US singer Taylor Swift poses in the press room after winning six awards at the 50th Annual American Music Awards at the Microsoft Theater in Los Angeles, California, on November 20, 2022. –
Valerie Macon | AFP | Getty Images
Earlier this year, as the crypto meltdown was draining the industry of liquidity, FTX executives were begging company founder Sam Bankman-Fried to preserve cash and stop spending hundreds of millions of dollars on celebrity endorsements.
But the 30-year-old billionaire, who’d relied on branding and hype to rapidly take his crypto exchange from upstart to stalwart, was set on signing up one more big name.
Three people close to FTX and Bankman-Fried told CNBC that the former CEO lobbied aggressively for a partnership with 11-time Grammy Award winner Taylor Swift. The deal, which would have cost the now bankrupt company more than $100 million over three years, was close to coming to fruition before it fell apart in the spring, said the people, who asked not to be named because of confidentiality agreements.
The former executives, who had direct knowledge of the negotiations, said the partnership would’ve been a disaster for FTX because of the steep price tag. Bankman-Fried’s commitment to getting the Swift deal done despite the deteriorating business environment fit a pattern of ignoring his lieutenants and going it alone, a half-dozen former company insiders and business partners said.
The Financial Times reported earlier that FTX held talks with Swift about a potential sponsorship.
Bankman-Fried’s overconfidence was embedded into an organization that had few checks on its leader and no board of directors to hold him accountable. Meanwhile, Bankman-Fried portrayed a very different persona to the public, showing himself as a quirky young genius comfortable in shorts and a T-shirt or in a suit in front of Congress who repeatedly professed his belief in effective altruism, a philosophy that promotes the idea of earning a lot of money in order to donate it to the most important causes.
Valued at $32 billion earlier this year by private investors, FTX spiraled into bankruptcy last month after skepticism emerged about the health of the crypto exchange’s financials and customers began demanding withdrawals only to be told their money wasn’t available. Even facing potential criminal charges and the possibility of years in prison, Bankman-Fried has continued to shun advisers by speaking publicly, offering press interviews and tweeting his defense.
CEO Sam Bankman-Fried
Bloomberg | Bloomberg | Getty Images
“I have a duty to talk to people; I have a duty to explain what happened,” Bankman-Fried said in a video interview at the New York Times DealBook Summit last week, acknowledging that his lawyers are opposed to his current tactics. “I don’t see what good is accomplished by me just sitting locked in a room pretending the outside world doesn’t exist.”
Between his DealBook appearance, an interview with ABC’s “Good Morning America” and his commentary on various podcasts, Bankman-Fried has repeatedly claimed that FTX’s downfall was the result of sloppy management and excessive risk.
Bankman-Fried has denied committing fraud and said he was unaware of much of the intermingling of funds that took place between FTX and Alameda Research, Bankman-Fried’s hedge fund. At least $8 billion in FTX customer funds are now unaccounted for and were used to backstop billions in loan losses at Alameda.
Pursuing Swift NFTs
Bankman-Fried also ran fast and loose with company cash. Within just over two years of starting FTX in 2019, Bankman-Fried signed a $135 million, 19-year deal with the NBA’s Miami Heat for naming rights on the team’s arena. He also inked sponsorships with the Golden State Warriors, Major League Baseball and Formula One and got Larry David to promote the company in a Super Bowl ad. Gisele Bündchen, Tom Brady, Shaquille O’Neal, Stephen Curry, David Ortiz and Naomi Osaka were among the brand’s ambassadors.
Part of the Swift deal would have included the production by the singer of a collection of non-fungible tokens (NFTs), or digital items that can rise and fall in value. Beyond that, there was a lack of clarity over what Swift would be doing for the company, sources said. After the Swift agreement fell apart, talks emerged internally over a deal with Katy Perry as recently as August, one person said.
Representatives for Swift declined to comment, and Perry did not respond to CNBC’s request for comment.
FTX insiders said that while some people in and around the company questioned Bankman-Fried’s decisions, he surrounded himself most immediately with a crew of yes men. Two sources used the word “insular” in describing his leadership style. Bankman-Fried mainly sought advice from a tight-knight group in the Bahamas, where he lived and where the company was headquartered, sources said.
One former FTX executive said Bankman-Fried had a tendency to chew out employees who disagreed with him in a way that deterred others from speaking up. When Bankman-Fried was angry, sources said his knee-jerk reaction was to immediately blame underlings. Some former insiders said Bankman-Fried put on an act for the public, portraying himself as an easygoing CEO.
Bankman-Fried said in a message to CNBC that he disagrees with the characterizations provided by those former employees. He declined to comment on details of the Swift negotiations.
“Partnerships were an area that was more contentious and on the margin I originally was in favor and ultimately started pushing back on new ones,” Bankman-Fried said in the message.
John Ray, the new CEO tapped to restructure FTX said in filings that in his 40 years of legal experience, which includes Enron’s liquidation, he had never seen “such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here.”
One of Bankman-Fried’s closest confidants was Caroline Ellison, the ex-CEO of Alameda Research, who he once dated. The pair would often go on lunch walks around FTX’s fenced-in Nassau headquarters, one FTX executive said.
Outside of his Bahamas cohort, Bankman-Fried went to great lengths to avoid speaking to others and he stayed away from face-to-face confrontations, preferring the encrypted messaging app Signal or Slack, one top deputy said. He frequently ignored messages from C-level executives if he disagreed with them.
Another former insider said employees were afraid of Bankman-Fried, adding that “there were very few people who were willing to challenge Sam.”
WATCH: Bankman-Fried said he didn’t ever try to commit fraud on anyone
Tik Tok creators gather before a press conference to voice their opposition to the “Protecting Americans from Foreign Adversary Controlled Applications Act,” pending crackdown legislation on TikTok in the House of Representatives, on Capitol Hill in Washington, U.S., March 12, 2024.
Craig Hudson | Reuters
The Supreme Court on Friday will hear oral arguments in the case involving the future of TikTok in the U.S., which could ban the popular app as soon as next week.
The justices will consider whether the Protecting Americans from Foreign Adversary Controlled Applications Act, the law that targets TikTok’s ban and imposes harsh civil penalties for app “entities” that continue to carry the service after Jan.19, violates the U.S. Constitution’s free speech protections.
It’s unclear when the court will hand down a decision, and if China’s ByteDance continues to refuse to divest TikTok to an American company, it faces a complete ban nationwide.
What will change about the user experience?
The roughly 115 million U.S. TikTok monthly active users could face a range of scenarios depending on when the Supreme Court hands down a decision.
If no word comes before the law takes effect on Jan. 19 and the ban goes through, it’s possible that users would still be able to post or engage with the app if they already have it downloaded. However, those users would likely be unable to update or redownload the app after that date, multiple legal experts said.
Thousands of short-form video creators who generate income from TikTok through ad revenue, paid partnerships, merchandise and more will likely need to transition their businesses to other platforms, like YouTube or Instagram.
“Shutting down TikTok, even for a single day, would be a big deal, not just for people who create content on TikTok, but everyone who shares or views content,” said George Wang, a staff attorney at the Knight First Amendment Institute who helped write the institute’s amicus briefs on the case.
“It sets a really dangerous precedent for how we regulate speech online,” Wang said.
Who supports and opposes the ban?
Dozens of high-profile amicus briefs from organizations, members of Congress and President-elect Donald Trump were filed supporting both the government and ByteDance.
The government, led by Attorney General Merrick Garland, alleges that until ByteDance divests TikTok, the app remains a “powerful tool for espionage” and a “potent weapon for covert influence operations.”
Trump’s brief did not voice support for either side, but it did ask the court to oppose banning the platform and allow him to find a political resolution that allows the service to continue while addressing national security concerns.
The short-form video app played a notable role in both Trump and Democratic nominee Kamala Harris’ presidential campaigns in 2024, and it’s one of the most common news sources for younger voters.
In a September Truth Social post, Trump wrote in all caps Americans who want to save TikTok should vote for him. The post was quoted in his amicus brief.
What comes next?
It’s unclear when the Supreme Court will issue its ruling, but the case’s expedited hearing has some predicting that the court could issue a quick ruling.
The case will have “enormous implications” since TikTok’s user base in the U.S. is so large, said Erwin Chemerinsky, dean of Berkeley Law.
“It’s unprecedented for the government to prohibit platforms for speech, especially one so many people use,” Chemerinsky said. “Ultimately, this is a tension between free speech issues on the one hand and claims of national security on the other.”
WATCH: It appears TikTok could really get shut down, says Jim Cramer
Nvidia CEO Jensen Huang speaks about Project Digits personal AI supercomputer for researchers and students during a keynote address at the Consumer Electronics Show (CES) in Las Vegas, Nevada on January 6, 2025. Gadgets, robots and vehicles imbued with artificial intelligence will once again vie for attention at the Consumer Electronics Show, as vendors behind the scenes will seek ways to deal with tariffs threatened by US President-elect Donald Trump. The annual Consumer Electronics Show (CES) opens formally in Las Vegas on January 7, 2025, but preceding days are packed with product announcements. (Photo by Patrick T. Fallon / AFP) (Photo by PATRICK T. FALLON/AFP via Getty Images)
Patrick T. Fallon | Afp | Getty Images
Nvidia CEO Jensen Huang was greeted as a rock star this week CES in Las Vegas, following an artificial intelligence boom that’s made the chipmaker the second most-valuable company in the world.
At his nearly two-hour keynote on Monday kicking off the annual conference, Huang packed a 12,000-seat arena, drawing comparisons to the way Steve Jobs would reveal products at Apple events.
Huang concluded with an Apple-like trick: a surprise product reveal. He presented one of Nvidia’s server racks and, using some stage magic, held up a much smaller version, which looked like a tiny cube of a computer.
“This is an AI supercomputer,” Huang said, while donning an alligator skin leather jacket. “It runs the entire Nvidia AI stack. All of Nvidia’s software runs on this.”
Huang said the computer is called Project Digits and runs off a relative of the Grace Blackwell graphics processing units (GPUs) that are currently powering the most advanced AI server clusters. The GPU is paired with an ARM-based Grace central processing unit (CPU). Nvidia worked with Chinese semiconductor company MediaTek to create the system-on-a chip called GB10.
Formerly known as the Consumer Electronics Show, CES is typically the spot to launch flashy and futuristic consumer gadgets. At this year’s show, which started on Tuesday and wraps up on Friday, several companies announced AI integrations with appliances, laptops and even grills. Other major announcements included a laptop from Lenovo which has a rollable screen that can expand vertically. There were also new robots, including a Roomba competitor with a robotic arm.
Unlike Nvidia’s traditional GPUs for gaming, Project Digits isn’t targeting consumers. instead, it’s aimed at machine learning researchers, smaller companies, and universities that want to developed advanced AI but don’t have the billions of dollars to build massive data centers or buy enough cloud credits.
“There’s a gaping hole for data scientists and ML researchers and who are actively working, who are actively building something,” Huang said. “Maybe you don’t need a giant cluster. You’re just developing the early versions of the model, and you’re iterating constantly. You could do it in the cloud, but it just costs a lot more money.”
The supercomputer will cost about $3,000 when it becomes available in May, Nvidia said, and will be available from the company itself as well as some of its manufacturing partners. Huang said Project Digits is a placeholder name, indicating it may change by the time the computer goes on sale.
“If you have a good name for it, reach out to us,” Huang said.
Diversifying its business
It’s a dramatically different kind of product from the GPUs that have driven Nvidia’s historic boom in the past two years. OpenAI, which launched ChatGPT in late 2022, and other AI model creators like Anthropic have joined with large cloud providers in snapping up Nvidia’s data center GPUs because of their ability to power the most intensive models and computing workloads.
Data center sales accounted for 88% of Nvidia’s $35 billion in revenue in the most recent quarter.
Wall Street is focused on Nvidia’s ability to diversify its business so that it’s less reliant on a handful of customers buying massive AI systems.
The Nvidia Project Digits supercomputer during the 2025 CES event in Las Vegas, Nevada, US, on Wednesday, Jan. 8, 2025.
Bridget Bennett | Bloomberg | Getty Images
“It was a little scary to see Nvidia come out with something so good for so little in price,” Melius Research analyst Ben Reitzes wrote in a note this week. He said Nvidia may have “stolen the show,” due to Project Digits as well other announcements including graphics cards for gaming, new robot chips and a deal with Toyota.
Project Digits, which runs Linux and the same Nvidia software used on the company’s GPU server clusters, represents a huge increase in capabilities for researchers and universities, said David Bader, director of the Institute for Data Science at New Jersey Institute of Technology.
Bader, who has worked on research projects with Nvidia in the past, said the computer appears to be able to handle enough data and information to train the biggest and most cutting-edge models. He told CNBC Anthropic, Google, Amazon and others “would pay $100 million to build a super computer for training” to get a system with these sorts of capabilities.
For $3,000, users can soon get a product they can plug into a standard electrical outlet in their home or office, Bader said. It’s particularly exciting for academics, who have often left for private industry in order to access bigger and more powerful computers, he said.
“Any student who is able to have one of these systems that cost roughly the same as a high-end laptop or gaming laptop, they’ll be able to do the same research and build the same models,” Bader said.
Reitzes said the computer may be Nvidia’s first move into the $50 billion market for PC and laptop chips.
“It’s not too hard to imagine it would be easy to just do it all themselves and allow the system to run Windows someday,” Reitzes wrote. “But I guess they don’t want to step on too many toes.”
Huang didn’t rule out that possibility when asked about it by Wall Street analysts on Tuesday.
He said that MediaTek may be able to sell the GB10 chip to other computer makers in the market. He made sure to leave some mystery in the air.
“Obviously, we have plans,” Huang said.
Alice Weidel, co-leader of the far-right Alternative for Germany (AfD) political party, arrives to speak to the media with AfD co-leader Tino Chrupalla shortly after the AfD leadership confirmed Weidel as the party’s candidate for chancellor on December 07, 2024 in Berlin, Germany.
Maryam Majd | Getty Images
Elon Musk used his social network X to promote Germany’s far-right Alternative for Germany party, known as AfD, hosting a live discussion Thursday with party leader Alice Weidel, a candidate for chancellor, ahead of a general election on Feb. 23.
“I’m really strongly recommending that people vote for AfD,” Musk, who is CEO of Tesla and SpaceX in addition to his role at X, said about a half hour into the conversation. “That’s my strong recommendation.”
The AfD has been classified as a “suspected extremist organization” by German domestic intelligence services. The party’s platform calls for rigid asylum laws, mass deportations, cuts to social and welfare support in Germany, and the reversal of restrictions on combustion engine vehicles.
Thierry Breton, former European Union commissioner for the internal market, said in a Jan. 4 post on X directed at Weidel: “As a European citizen concerned with the proper use of systemic platforms authorized to operate in the EU … especially to protect our democratic rules against illegal or misbehavior during election times, I believe it’s crucial to remind you” that a live discussion on X would give AfD and Weidel “a significant and valuable advantage over your competitors.”
While AfD has amassed about 20% of public support, according to reporting from broadcaster DW, the party is unlikely to form part of a coalition government, as most other parties have vowed not to work with it.
AfD previously protested the build-out of Tesla’s electric vehicle factory outside Berlin, in part because the factory would provide jobs to people who were not German citizens.
Musk’s earlier endorsements of AfD, including tweets complimenting the party and an editorial in a German newspaper, have enraged European government officials. Musk, the wealthiest person in the world, has also endorsed far-right and anti-establishment candidates and causes in the U.K.
Political leaders in France, Germany, Norway and the U.K. denounced his influence, NBC News previously reported, warning that Musk should not involve himself in their countries’ elections.
Musk, who was one of President-elect Donald Trump’s top backers in November’s election, previously promoted Trump in a live-streamed discussion on X. Before that, he hosted a conversation with Florida Gov. Ron DeSantis, who lost to Trump in the Republican primary.
Weidel during Thursday’s talk asked Musk about what Trump might do to bring Russia’s war in Ukraine to a conclusion, as the president-elect has suggested he could quickly do.
Musk demurred.
“To be clear this is up to President Trump, he is commander and chief, so it’s really up to him,” Musk said. “I don’t want to speak for him but you know I do think that there is a path to a resolution but it does require strong leadership in the United States to get this done.”
Musk also weighed in on what he thought should be done in Gaza, which has been under attack from Israel since Hamas’ deadly incursion into Israel on Oct. 7, 2023.
“There’s no choice but to eliminate those who wish to eliminate the state of Israel, you know Hamas essentially,” Musk said. “Then, the second step is to fix the education so that Palestinians are not trained from when they are children to hate and want the death of Israel.”
“Then, the third thing, which is also very important, is to make the Palestinian areas prosperous.”
— CNBC’s Sophie Kiderlin contributed to this report.
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