Former FTX engineer tells jury about panicky rooftop meeting where he learned how bad things were
Government exhibit in Sam Bankman-Fried’s criminal trial
Source: SDNY
In afternoon testimony Monday, former FTX engineering chief Nishad Singh told a Manhattan jury about two one-on-one meetings he held with Sam Bankman-Fried last year to discuss the dire state of the crypto firm’s finances.
Singh, who joined sister hedge fund Alameda Research in 2017 and then helped build the FTX exchange two years later, said that at most he would have a single private meeting with Bankman-Fried a year, so it was rare for him to get this much face time alone with the boss.
Singh said he asked for a meeting following a text exchange he had in June 2022 with Caroline Ellison, who ran Alameda, and Gary Wang, an FTX co-founder. The trio had a Signal chat called #organization to discuss the steep public relations costs to FTX if Alameda’s financial problems were made public. During that exchange, Singh said he learned from Wang that Alameda was borrowing $13 billion from FTX.
Until that point, Singh testified, he thought FTX’s assets were greater than its liabilities. To discuss the matter, Singh said he and Bankman-Fried met on the lush rooftop deck at the Orchid, the Bahamas residential building where the FTX and Alameda crew had an 11,500-square foot apartment.
Singh is cooperating with the prosecution as part of a plea deal he agreed to in February. At the time, Singh pleaded guilty to six charges, including conspiracy to commit securities fraud, conspiracy to commit money laundering and conspiracy to violate campaign finance laws. Bankman-Fried faces seven criminal fraud charges and the potential of life in prison. He pleaded not guilty.
Over the course of a conversation that Singh said lasted an hour to an hour and a half, Bankman-Fried reclined on a white chaise lounge chair. Singh said he started the conversation by saying, “Caroline is really freaked out about the NAV situation, and so am I.” NAV refers to net asset value, or the value of assets minus liabilities.
Assistant U.S. Attorney Nicolas Roos questions Nishad Singh, the former director of engineering at FTX, at Sam Bankman-Fried’s fraud trial over the collapse of FTX, the bankrupt cryptocurrency exchange, at Federal Court in New York City, October 16, 2023 in this courtroom sketch.
Jane Rosenberg | Reuters
Bankman-Fried tried to reassure Singh, telling him, “I’m not sure what there is to worry about” because NAV was “super positive.”
When Singh asked about the $13 billion that Alameda couldn’t pay back to FTX, Bankman-Fried responded, “Right, that, we are a little short on deliverables,” according to the testimony. Singh asked about the size of the shortfall, and Bankman-Fried said that was the wrong question to be asking. The right question, he said, was how much the company could deliver. Bankman-Fried said he thought it could deliver $5 billion relatively quickly and “substantially more” in the next few weeks to months.
Singh responded with an expletive. Bankman-Fried then said the issue had been taking up 5% to 10% of his productivity that year.
But Bankman-Fried said he wasn’t too worried, and that Alameda could sell assets. FTX could also raise money from investors and was launching its U.S. futures soon, which would be a boon for the business, Bankman-Fried said, according to Singh’s testimony.
After Singh asked if he would finally agree to curb spending, Bankman-Fried said, “Yes, definitely.” Singh testified that after five years of putting everything into the company, he “felt betrayed” that it “turned out to be so evil.” He said he considered leaving every day but wasn’t sure if he could live with himself if his exit resulted in the business failing.
Bankman-Fried told Singh that he and FTX product head Ramnik Arora would be in New York in two weeks, and then in a month he’d be heading to the Middle East with Anthony Scaramucci, an FTX investor.
Singh then described in detail a second meeting that he’d requested upon Bankman-Fried’s return from the Middle East. He said the FTX founder had come back in the middle of the day and immediately attracted a crowd, “like he so often does.”
That next meeting took place in Bankman-Fried’s second Bahamas apartment, which he called the Gemini 1D apartment. There, Singh told the jury, he thought he might quit but instead asked Bankman-Fried for a real sense of how things went on the overseas trip.
Bankman-Fried said it was still possible to get another $5 billion. Singh wanted to know the plan for getting the rest needed to fill the $13 billion hole. Bankman-Fried told him the main plan was that FTX remain successful, adding that Singh was one of the few people who could make that happen.
Singh described Bankman-Fried as on edge during that conversation. He appeared mad and had his hands back, grinding his fingers and grinding his teeth.
“He glared at me with some intensity,” Singh testified. Singh then asked, “Dear god, what else is there?” At the end, he apologized to Bankman-Fried for asking for the meeting.
Singh told the jury that he faces a max of 75 years in prison but is “hoping for no jail time.”
— CNBC’s Dawn Giel contributed to this report
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A mockup of Tesla Inc.’s planned humanoid robot Optimus on display during the Seoul Mobility Show in Goyang, South Korea, on Thursday, March 30, 2023. The motor show will continue through April 9. Photographer: SeongJoon Cho/Bloomberg via Getty Images
Bloomberg | Bloomberg | Getty Images
Tesla CEO Elon Musk predicted that Optimus robots, which have yet to hit the market, will eventually make up more than three-quarters of his automaker’s value.
In a post on X on Monday, Musk wrote, “~80% of Tesla’s value will be Optimus.” In mid-2024, Musk predicted that Optimus robots would someday turn Tesla into a $25 trillion company, which was equal to more than half of the entire value of the S&P 500 at the time of his comment.
With Tesla in the midst of a multi-quarter sales slump due to competition from lower-cost Chinese competitors, an aging lineup of electric vehicles and Musk’s incendiary political rhetoric and involvement with the Trump administration, the world’s richest person has been trying to convince Wall Street to look to the future.
For Tesla, that dream revolves around a world filled with robotaxis and humanoid robots, powered by artificial intelligence.
“It is important to note that Tesla is by far the best in the world at real-world AI,” Musk said in the company’s second-quarter conference call with analysts in July.
The problem for Tesla is that it’s behind in those key markets.
In robotaxis, Tesla has only recently started tests in Austin, Texas, and San Francisco, while Alphabet’s Waymo is live in numerous markets and reached 10 million paid trips in May. Baidu’s Apollo Go is live in China.
Meanwhile, competition in humanoid robots is coming from the likes of Chinese companies like Unitree, which won multiple medals at the World Humanoid Robot Games. Others in the space include Boston Dynamics, Agility Robotics, Apptronik, 1X and Figure.
Musk said in March that Tesla plans to make 5,000 of its Optimus robots this year. In its first-quarter shareholder deck, Tesla said it was on target for “builds of Optimus on our Fremont pilot production line in 2025, with wider deployment of bots doing useful work across our factories.”
Tesla recently lost the person running the division.
Milan Kovac, Tesla’s vice president of Optimus robotics, announced his departure in June after nine years at the company.
Tesla is developing Optimus with the aim of someday selling it as a bipedal, intelligent robot capable of everything from factory work to babysitting.
— CNBC’s Lora Kolodny contributed to this report.
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SAP to invest over 20 billion euros in ‘sovereign cloud’ in boost to Europe’s AI ambitions
Technology
Microsoft offers U.S. government over $6 billion in savings on cloud services over 3 years
President Donald Trump shakes hands with Microsoft CEO Satya Nadella during an American Technology Council roundtable at the White House in Washington on June 19, 2017.
Nicholas Kamm | AFP | Getty Images
Microsoft has agreed to give the U.S. General Services Administration $3.1 billion in potential savings over the course of a year on cloud services used at government agencies.
Since President Donald Trump’s return to the White House in January, the GSA has sought to aggregate spending through a strategy called OneGov that’s meant to lower prices. Adobe, Amazon, Google and Salesforce have already come forward with discounts.
Agencies have to buy through the GSA to take advantage of the Microsoft savings through September 2026. The lower prices will be available for three years, resulting in total savings of over $6 billion, Microsoft said.
The discounts apply to Microsoft’s Office productivity subscriptions, as well as Azure cloud infrastructure, Dynamics 365 business applications and Sentinel cybersecurity software. Microsoft is throwing in a year of free access to the Copilot artificial intelligence assistant for millions of workers with Microsoft 365 G5 subscriptions, the company said.
Agencies can easily switch to the lower price, said Josh Gruenbaum, who left his director position at private equity firm KKR to become commissioner of the GSA’s Federal Acquisition Service after Trump’s second term began.
The GSA oversees about $110 billion in spending on common goods and services from many agencies, out of about $450 billion in total spending across the federal government, Gruenbaum said in an interview. The GSA is working to absorb procurement for NASA and the National Institutes of Health, to comply with an executive order Trump signed in March, Gruenbaum said.
Around $80 billion in spending is tied to IT, and Microsoft’s annual U.S. government revenue probably stands in the mid- to high-single-digit billions of dollars, Gruenbaum said.
“It’s no surprise that Microsoft is one of the most critical partners for the federal government in terms of its software and the tooling that we use around both the civilian side and the defense side,” Gruenbaum said.
Gruenbaum said he spoke numerous times about the deal with Microsoft CEO Satya Nadella.
“I think the biggest piece is he wants to partner with this administration and get this right for AI adoption,” Gruenbaum said of Nadella. “But I also think he wants to go and take market share from some of the other tools and services that are out there.”
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