Takeaways from Going Infinite by Michael Lewis
The story of Sam Bankman-Fried and the downfall of crypto-exchange FTX
Michael Lewis, renowned for his in-depth and personal insights into captivating subjects, has once again delivered his latest investigation of Sam Bankman-Fried (SBF), the once-celebrated founder of Alameda Research and FTX. Author David Brooks mused in his book ‘How to Know a Person’ that Lewis’s charm as a conversationalist grants him access to depths of his subjects that many journalists can only dream of. This certainly holds for his work on SBF, whose Icarus-like downfall from grace Lewis captures with his signature piercing gaze.
The young man’s journey reminded me of many of the themes we discuss in the ‘All King David’s Men’ Substack around timeless principles of integrity and the temptation to act recklessly. Here are a few of the themes Lewis picked up on:
Business as a game. SBF was an avid gamer, excelling at rapid decision-making with limited information. This won him a spot at the exclusive trading firm Jane Street and impacted the way he made business decisions. However, it made him a weak manager of other people’s money and a chaotic organizational leader. Lewis gives examples of SBF’s callous attitude toward resources and financial decisions. Yet, the young man refused to hire a CFO and disparaged people over 40. He broke the trust with the people who invested their wealth with him by failing to couple his strategic prowess with a sense of responsibility.
Morals devoid of feeling. SBF adhered to the Effective Altruism (EA) ethos, popular among graduates of prestigious schools. EA is a movement centered on making money with the intent of giving it away. Adherents make decisions based on whether they will get a good return on investment for their time so they can donate to high-impact causes.
While admirable in some ways, EA doesn’t provide an intrinsic moral compass beyond gauging the probable outcome of actions. Therefore, it came up short as a way to guide SBF as he navigated murky regulatory waters.
Contempt for liberal arts. SBF loathed subjects like English and social studies, disparaging Shakespeare and criticizing required classes as a waste of time. He leaned into mathematical disciplines without rounding out his thinking by applying the humanities. He never learned how to relate to others or understand their inner working, beyond the levers he could pull for his games.
Poking the bear. The implosion of FTX was triggered by the retribution of a rival crypto exchange manager when SBF attempted to disrupt his foothold in Dubai. Perhaps if he had read more literature, he would have anticipated the counterattack.
The power and risks of social proof. Lewis opens with a story about how he interviewed SBF for a friend who wondered if he lived up to the hype. In his report back, Lewis, like so many others, overlooked the young man’s quirks and raved about him. He was mesmerized by SBF’s adeptness at navigating the emerging crypto market. Lewis’ confession that he, too, was caught up in wonder, is a reminder that we all need to keep healthy skepticism and do our due diligence rather than relying on others’ opinions alone.
Going Infinite provides unique insights into genius gone wrong. It’s also a reflection on how our admiration can give way to naivety about a wunderkind’s capabilities. Character matters even as technology and financial markets change.
I plan to explore a few of the themes in the book through the lens of ‘All the Kings Men’ and would love to hear your thoughts in the meantime. What stands out to you in the SBF story? Where would you like to see us deep dive in this Substack?