Sam Bankman-Fried has one more shot at avoiding prison as criminal trial set to wrap up

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2 years ago

October 31, 2023

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FTX Founder Sam Bankman-Fried arrives at Manhattan Federal Court for a court appearance in New York, United States on June 15, 2023.

Fatih Aktas/ | Anadolu Agency | Getty Images

Sam Bankman-Fried, who pleaded not guilty to criminal fraud charges tied to the collapse of his crypto empire, has one last chance to get a Manhattan jury to believe him.

After two days on the witness stand, Bankman-Fried is set to wrap up his testimony on Tuesday. All that’s left is a couple more hours of cross-examination by prosecutors, followed by a redirect examination by Bankman-Fried’s team. After that, the defense plans to rest its case.

The roughly four-week trial has largely consisted of government-supported testimony from Bankman-Fried’s former close friends, confidants and top executives at crypto exchange FTX and sister hedge fund Alameda Research. They all singled out Bankman-Fried as the mastermind of a scheme to use FTX customer money to fund everything from venture investments and a high-priced condo in the Bahamas to covering Alameda’s crypto losses after the market crashed last year.

Bankman-Fried’s defense failed to land any significant blows in cross-examining the prosecution’s key witnesses, including Caroline Ellison, the defendant’s ex-girlfriend and the former head of Alameda. When it was defense attorney Mark Cohen’s chance to take the lead, he only called three witnesses, with the bulk of his case riding on Bankman-Fried’s ability to convince the jury of his story.

The 31-year-old former billionaire, whose crypto businesses spiraled into bankruptcy over the course of a few days last November, told jurors in his first day on the stand on Friday that he didn’t commit fraud and that he thought FTX’s outside expenditures, like paying for the naming rights at a sports arena, came out of company profits.

When asked by Cohen on Friday morning if he defrauded anyone, Bankman-Fried said, “No, I did not.” His lawyer then asked if he took customer money, to which Bankman-Fried said, “No.”

FTX founder Sam Bankman-Fried is questioned by prosecutor Danielle Sassoon during his fraud trial over the collapse of the bankrupt cryptocurrency exchange, before U.S. District Judge Lewis Kaplan at federal court in New York City, U.S., October 30, 2023 in this courtroom sketch.

Jane Rosenberg | Reuters

Bankman-Fried, the son of two Stanford University legal scholars, faces seven criminal counts, including wire fraud, securities fraud and money laundering, that could land him in prison for life if he’s convicted. His argument to the jury is that he made mistakes, like not having a risk management team in place, which led to “significant oversights.” But when it comes to the central question — what happened to billions of dollars in customer money — Bankman-Fried doesn’t offer any clear explanations and claims to not really know.

Ellison, who was one of several witnesses cooperating with the government on a plea deal, had a more precise answer, in her Oct. 10 appearance on the stand.

“We ultimately took around $14 billion, some of which we were able to pay back,” she said. “I sent balance sheets to lenders at the direction of Sam that incorrectly stated Alameda’s assets and liabilities.”

Ellison said Alameda siphoned several billion dollars from FTX customers and that Bankman-Fried had not only set up a system to steal the funds but also directed Ellison and others to use customer funds to repay loans in the ballpark of $10 billion.

Bankman-Fried testified that he wasn’t aware of the amount Alameda was borrowing from FTX, or its theoretical max. As long as Alameda’s net asset value was positive and the scale of borrowing was reasonable, increasing its line of credit so that Alameda could keep filling orders was fine, he said. Earlier testimony from former engineering director Nishad Singh and co-founder Gary Wang suggested the line of credit was raised to $65 billion, a number Bankman-Fried said he wasn’t aware of.

Prosecutors entered corroborating materials, including encrypted Signal messages and other internal documents that appear to show Bankman-Fried orchestrating the spending of FTX customer money.

‘Average level sports fan’

Bankman-Fried tried to explain away some of those expenses. For example, the naming rights to Miami’s basketball arena would cost $10 million a year, or roughly 1% of revenue, and deliver returns well in excess of that because of the brand awareness it would create for even an “average level sports fan,” he said. He added that he thought the money was coming from revenue from the exchange and returns from venture investments, as opposed to customer funds.

On Monday, Bankman-Fried’s strategy shifted to one of blaming many of his former top lieutenants, who’d previously testified against him.

Caroline Ellison, former chief executive officer of Alameda Research LLC, leaves Manhattan Federal Court after testifying during the trial of FTX CEO Sam Bankman-Fried, on October 10, 2023 in New York City.

Michael M. Santiago | Getty Images

When it came to Ellison, Bankman-Fried said that he repeatedly tried to make sure she was implementing sufficient hedging strategies at Alameda to ensure the fund didn’t collapse under the weight of tumbling crypto prices.

Bankman-Fried testified about several conversations on the matter he’d had with Ellison between June and September 2022, and said he was notably concerned about the decline in Alameda’s net asset value from $40 billion the prior year to $10 billion.

The market had already dropped 70% and if it fell another 50%, he was afraid the firm would be insolvent, Bankman-Fried told the jury.

“She started crying,” Bankman-Fried said, regarding Ellison’s reaction when he told her that. “She agreed.”

Bankman-Fried said Ellison offered to resign over the matter, but the defendant testified he wasn’t focused on blame or past failures but rather making sure that Alameda remained solvent.

In September, he checked in again with Ellison about the hedging activity, Bankman-Fried testified. Ellison told him Alameda had hedged. He asked about the scale of the trades and said his instinct was that they could have been twice the size. After Ellison sent him spreadsheets about the trades, she agreed there was more room to hedge and she did so, Bankman-Fried said.

In walking through FTX’s failure, Bankman-Fried discussed the role played by Singh, who was also called as a government witness. Bankman-Fried highlighted Singh’s personal financial problems, and said he was suicidal with a therapist on call 24/7 to watch over him. Bankman-Fried said he was trying to comfort Singh about his loans and expenses in part to prevent him from hurting himself.

In describing the swift downfall of FTX, Bankman-Fried said that customer withdrawals had quickly increased from $50 million a day to $1 billion a day. He said it was like a run on the bank and he was very concerned since the only way to withdraw all customer funds was to liquidate every open margin trade.

Bankman-Fried defended his tweets from early November that he said were designed to ease customer concerns.

Regarding the “assets are fine” tweet he wrote during the panic, he said he thought Alameda’s net asset value was roughly $10 billion and that FTX didn’t have a hole in its balance sheet.

“My view was the exchange was OK and there was no hole in the assets,” he told the court.

Shorter answers

In testimony later on Monday, Bankman-Fried was faced with cross-examination as the government had its turn with the defendant. Far from the more descriptive answers Bankman-Fried provided in response to Cohen’s questions, the prosecutors inquiries were met with a lot of quick replies like “Yep” and “I don’t recall.”

In some instances, his answers were directly followed with a government exhibit, such as a tweet, interview transcript, congressional testimony or email, intended to dispute his answer.

For example, Assistant U.S. Attorney Danielle Sassoon asked Bankman-Fried if he assured people that Alameda played by the same rules as others on the FTX exchange. Bankman-Fried said he wasn’t sure. The government followed by showing a tweet from him directly addressing the topic along with an email in which he wrote that Alameda’s account is like everyone else’s.

After the government wraps its questioning on Tuesday and the defense gets its shot at redirect, all that’s left on the docket is two witness rebuttals from the prosecution. One will come from an FBI data analyst and the other from an employee at investment firm Apollo, which had been in talks to help finance an FTX rescue.

At that point, Bankman-Fried’s fate will lie in the hands of the 12 jurors who have spent the past four weeks sitting a few feet away from the defendant in a lower Manhattan courtroom.

If you are having suicidal thoughts or are in distress, contact the Suicide & Crisis Lifeline at 988 for support and assistance from a trained counselor.

— CNBC’s Dawn Giel contributed to this report

WATCH: Sam Bankman-Fried walks jury through final days of FTX

Sam Bankman-Fried walks jury through final days of FTX: CNBC Crypto World

Technology

Europe sets its sights on multi-billion-euro gigawatt factories as it plays catch-up on AI

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4 hours ago

July 29, 2025

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Europe sets its sights on multi-billion-euro gigawatt factories as it plays catch-up on AI

Data storage tapes are stored at the National Energy Research Scientific Computing Center (NERSC) facility at the Lawrence Berkeley National Laboratory, which will house the U.S. supercomputer to be powered by Nvidia’s forthcoming Vera Rubin chips, in Berkeley, California, U.S. May 29, 2025.

Manuel Orbegozo | Reuters

Europe is setting its sights on gigawatt factories in a bid to bolster its lagging artificial intelligence industry and meet the challenges of a rapidly-changing sector.

Buzz around the concept of factories that industrialize manufacturing AI has gained ground in recent months, particularly as Nvidia CEO Jensen Huang stressed the importance of the infrastructure at a June event. Huang hailed a new “industrial revolution” at the GTC conference in Paris, France, and said his firm was working to help countries build revenue-generating AI factories through partnerships in France, Italy and the U.K.

For its part, the European Union describes the factories as a “dynamic ecosystem” that brings together computing power, data and talent to create AI models and applications.

The bloc has long been a laggard behind the U.S. and China in the race to scale up artificial intelligence. With 27 members in the union, the region is slower to act when it comes to agreeing new legislation. Higher energy costs, permitting delays and a grid in dire need of modernization can also hamper developments.

Henna Virkkunen, the European Commission’s executive vice president for tech sovereignty, told CNBC that the bloc’s goal is to bring together high quality data sets, computing capacity and researchers, all in one place.

“We have, for example, 30% more researchers per capita than the U.S. has, focused on AI. Also we have around 7,000 startups [that] are developing AI, but the main obstacle for them is that they have very limited computing capacity. And that’s why we decided that, together with our member states, we are investing in this very crucial infrastructure,” she said.

These are very big investments because they are four times more powerful when it comes to computing capacities than the biggest AI factories.

Henna Virkkunen

European Commission’s executive vice president for tech sovereignty

“We have everything what is needed to be competitive in this sector, but at the same time we want to build up our technological sovereignty and our competitiveness.”

So far, the EU has put up 10 billion euros ($11.8 billion) in funding to set up 13 AI factories and 20 billion euros as a starting point for investment in the gigafactories, marking what it says is the “largest public investment in AI in the world.” The bloc has already received 76 expressions of interest in the gigafactories from 16 member states across 60 sites, Virkkunen said.

The call for interest in gigafactories was “overwhelming,” going far beyond the bloc’s expectations, Virkkunen noted. However, in order for the factories to make a noteworthy addition to Europe’s computing capacity, significantly more investment will be required from the private sector to fund the expensive infrastructure.

‘Intelligence revolution’

The EU describes the facilities as a “one-stop shop” for AI firms. They’re intended to mirror the process carried out in industrial factories, which transform raw materials into goods and services. With an AI factory, raw data goes into the input, and advanced AI products are the expected outcome.

It’s essentially a data center with additional infrastructure related to how the technology will be adopted, according to Andre Kukhnin, equity research analyst at UBS.

“The idea is to create GPU [graphics processing units] capacity, so to basically build data centers with GPUs that can train models and run inference… and then to create an infrastructure that allows you to make this accessible to SMEs and parties that would not be able to just go and build their own,” Kukhnin said.

How the facility will be used is key to its designation as an AI factory, adds Martin Wilkie, research analyst at Citi.

“You’re creating a platform by having these chips that have insane levels of compute capacity,” he said. “And if you’ve attached it to a grid that is able to get the power to actually use them to full capacity, then the world is at your feet. You have this enormous ability to do something, but what the success of it is, will be defined by what you use it for.”

Telecommunications firm Telenor is already exploring possible use cases for such facilities with the launch of its AI factory in Norway in November last year. The company currently has a small cluster of GPUs up and running, as it looks to test the market before scaling up.

Telenor’s Chief Innovation Officer and Head of the AI Factory Kaaren Hilsen and EVP Infrastructure Jannicke Hilland in front of a Nvidia rack at the firm’s AI factory

Telenor

“The journey started with a belief — Nvidia had a belief that every country needs to produce its own intelligence,” Telenor’s Chief Innovation Officer and Head of the AI Factory Kaaren Hilsen told CNBC.

Hilsen stressed that data sovereignty is key. “If you want to use AI to innovate and to make business more efficient, then you’re potentially putting business critical and business sensitive information into these AI models,” she said.

The company is working with BabelSpeak, which Hilsen described as a Norwegian version of ChatGPT. The technology translates sensitive dialogues, such as its pilot with the border police who can’t use public translation services because of security issues.

We’re experiencing an “intelligence revolution” whereby “sovereign AI factories can really help advance society,” Hilsen said.

Billion-euro investments

Virkkunen said the region’s first AI factory will be operational in coming weeks, with one of the biggest projects launching in Munich, Germany in the first days of September. It’s a different story for the gigafactories.

“These are very big investments because they are four times more powerful when it comes to computing capacities than the biggest AI factories, and it means billions in investments. Each of these need three to five billion [euros] in investment,” the commissioner said, adding that the bloc will look to set up a consortium of partners and then officially open a call for investment later this year.

Bertin Martens, senior research fellow at Bruegel, questioned why such investments needed to subsidized by government funds.

“We don’t know yet how much private investment has been proposed as a complement to the taxpayer subsidy, and what capacity and how big these factories are. This is still very much unclear at this stage, so it’s very hard to say how much this will add in terms of computing capacity,” he said.

Power consumption is also a key issue. Martens noted that building an AI gigafactory may take one to two years — but building a power generation of that size requires much more time.

“If you want to build a state-of-the-art gigafactory with hundreds of thousands of Nvidia chips, you have to count on the power consumption of at least one gigawatt for one of those factories. Whether there’s enough space in Europe’s electricity grid in all of these countries to create those factories remains to be seen… this will require major investment in power regeneration capacity,” he told CNBC.

UBS forecasts that the current installed global data center capacity of 85 GW will double due to soaring demand. Based on the EU’s 20-billion-euro investment and the plan for each factory to run 100,000 advanced processors, UBS estimates each factory could be around 100-150 MW with a total capacity for all of the facilities of around 1.5-2 GW.

That could add around 15% to Europe’s total capacity — a sizeable boost, even when compared to the U.S., which currently owns around a third of global capacity, according to the data.

Following the announcement of the EU-U.S. trade framework, EU chief Ursula von der Leyen said Sunday that U.S. AI chips will help power the bloc’s AI gigafactories in a bid to help the States “maintain their technological edge.”

“One could argue that it’s relatively easy, provided you have the money. It’s relatively easy to buy the chips from Nvidia and to create these hardware factories, but to make it run and to make it economically viable is a completely different question,” Martens told CNBC.

He said that the EU will likely have to start at a smaller scale, as the region is unable to immediately build its own frontier models in AI because of their expense.

“I think in time, Europe can gradually build up its infrastructure and its business models around AI to reach that stage, but that will not happen immediately,” Martens said.

Technology

India overtakes China in smartphone exports to the U.S. as manufacturing jumps 240%, report shows

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4 hours ago

July 29, 2025

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India overtakes China in smartphone exports to the U.S. as manufacturing jumps 240%, report shows

Workers assemble smartphones at Dixon Technologies’ Padget Electronics Pvt factory in Uttar Pradesh, India, on Jan. 28, 2021.

Bloomberg | Bloomberg | Getty Images

India has overtaken China to become the top exporter of smartphones to the U.S., according to research firm Canalys, reflecting the shift in manufacturing supply chain away from Beijing amid tariff-fueled uncertainty.

Smartphones assembled in India accounted for 44% of U.S. imports of those devices in the second quarter, a significant increase from just 13% in the same period last year. Total volume of smartphones made in India soared 240% from a year earlier, Canalys said.

In contrast, the share of Chinese smartphone exports to the U.S. shrank to 25% in the quarter ended June, from 61% a year earlier, Canalys data released Monday showed. Vietnam’s share of smartphone exports to the U.S. was also higher than that of China at 30%.

The surge in shipments from India was primarily driven by Apple‘s accelerated shift toward the country at a time of heightened trade uncertainty between the U.S. and China, said Sanyam Chaurasia, principal analyst at Canalys. This is the first time India exported more smartphones to the U.S. than China.

Apple has reportedly been speeding up its plans to make most of its iPhones sold in the U.S. at factories in India this year, with the aim of manufacturing around a quarter of all iPhones in the country in the next few years.

Trump has threatened Apple with additional tariffs and urged the company’s CEO Tim Cook to make iPhones domestically, a move experts have said would be nearly impossible as it would push iPhone prices higher.

While many of Apple’s core products, including iPhones and Mac laptops, have received exemptions from Trump’s “reciprocal tariffs,” officials have warned that it could be a temporary reprieve.

Its global peers, Samsung Electronic and Motorola, have also been striving to move assembly for U.S.-bound smartphones to India, though their shift has been significantly slower and is limited in scale compared with Apple, according to Canalys.

Last-mile assembly

Many global manufacturers have been increasingly shifting their final assembly to India, allocating more capacity in the South-Asian nation to serve the U.S. market, said Renauld Anjoran, CEO of Agilian Technology, an electronics manufacturer in China.

The Guangdong-based company is now renovating a facility in India with plans to move part of its production to the country. “The plan for India is moving ahead as fast as we can,” Anjoran said. The company expects to begin trial production runs soon before ramping up to full-scale manufacturing.

While shipments, which represent the number of devices sent to retailers do not reflect final sales, they are a proxy for market demand.

Overall, iPhone shipments declined by 11% year on year to 13.3 million units in the second quarter, reversing the 25% growth in the prior quarter, according to Canalys.

Shares of Apple have tumbled 14% this year, partly on concerns over its high exposure to tariff uncertainty and intensifying competition in smartphones and artificial intelligence sector.

While the company has begun assembling iPhone 16 Pro models in India, it still relies heavily on China’s more mature manufacturing infrastructure to meet U.S. demand for the premium model, Canalys said.

In April, Trump imposed a 26% tariff on imports from India, much lower than the triple-digit tariffs on China at the time, before pausing those duties until an Aug 1. deadline.

— CNBC’s Arjun Kharpal contributed to this story.

Technology

Waymo plans to bring its robotaxi service to Dallas in 2026

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9 hours ago

July 29, 2025

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Waymo plans to bring its robotaxi service to Dallas in 2026

A Waymo rider-only robotaxi is seen during a test ride in San Francisco, California, U.S., December 9, 2022.

Paresh Dave | Reuters

Alphabet’s Waymo unit plans on bringing its robotaxi service to Dallas next year, adding to a growing list of prospective U.S. markets for 2026, including Miami and Washington, D.C.

Rental car company Avis Budget Group will be managing the Waymo fleet in Dallas, via a new partnership the companies announced Monday.

Avis CEO Brian Choi said in a statement that the agreement marks a “milestone” for the company, which is now also working to become “a leading provider of fleet management, infrastructure and operations to the broader mobility ecosystem.”

Waymo robotaxi testing is already underway in downtown Dallas involving the company’s Jaguar I-PACE electric vehicles with the Waymo Driver system. That combines automated driving software, sensors and other hardware that power the vehicles’ “level 4,” driverless operations.

Passengers will be able to hail a driverless ride using the Waymo app in Dallas. In some other markets, Waymo only makes its services available through ride-hailing platform Uber.

Waymo has surged ahead in the robotaxi market while other autonomous vehicle developers, including Tesla, Amazon-owned Zoox, and venture-backed startups such as Nuro, May Mobility and Wayve, are working to make autonomous transportation a commercial reality in the U.S.

Waymo says it conducts more than 250,000 paid weekly trips in the markets where it operates commercially, including Atlanta, Austin, Los Angeles, Phoenix and San Francisco.

Waymo’s steepest competition internationally comes from Baidu’s robotaxi venture Apollo Go in China, which is eyeing expansion in Europe.

On Alphabet’s second-quarter earnings call, execs boasted that, “The Waymo Driver has now autonomously driven over 100 million miles on public roads, and the team is testing across more than 10 cities this year, including New York and Philadelphia.”

The business has become significant enough that Alphabet even added a category to its Other Bets revenue description in its latest quarterly filing.

“Revenues from Other Bets are generated primarily from the sale of autonomous transportation services, healthcare-related services and internet services,” the filing said.

The Other Bets segment remains relatively small, however, with revenue coming in at $373 million in the quarter, up from $365 million a year ago. The division still reported a loss of $1.25 billion, widening from $1.13 billion in the second quarter of 2024.

WATCH: Waymo co-CEO on 10 million driverless rides and Tesla’s coming robtaxi challenge