The two podcasts where I discuss FTX are now out:
The Sam Harris podcast is more aimed at a general audience; the Spencer Greenberg podcast is more aimed at people already familiar with EA. (I’ve also done another podcast with Chris Anderson from TED that will come out next month, but FTX is a fairly small part of that conversation.)
In this post, I’ll gather together some things I talk about across these podcasts — this includes updates and lessons, and responses to some questions that have been raised on the Forum recently. I’d recommend listening to the podcasts first, but these comments can be read on their own, too. I cover a variety of different topics, so I’ll cover each topic in separate comments underneath this post.
What I heard from former Alameda people
A number of people have asked about what I heard and thought about the split at early Alameda. I talk about this on the Spencer podcast, but here’s a summary. I’ll emphasise that this is me speaking about my own experience; I’m not speaking for others.
In early 2018 there was a management dispute at Alameda Research. The company had started to lose money, and a number of people were unhappy with how Sam was running the company. They told Sam they wanted to buy him out and that they’d leave if he didn’t accept their offer; he refused and they left.
I wasn’t involved in the dispute; I heard about it only afterwards. There were claims being made on both sides and I didn’t have a view about who was more in the right, though I was more in touch with people who had left or reduced their investment. That included the investor who was most closely involved in the dispute, who I regarded as the most reliable source.
It’s true that a number of people, at the time, were very unhappy with Sam, and I spoke to them about that. They described him as reckless, uninterested in management, bad at managing conflict, and being unwilling to accept a lower return, instead wanting to double down. In hindsight, this was absolutely a foreshadowing of what was to come. At the time, I believed the view, held by those that left, that Aladema had been a folly project that was going to fail.[1]
As of late 2021, the early Alameda split made me aware that Sam might be difficult to work with. But there are a number of reasons why it didn’t make me think I shouldn’t advise his foundation, or that he might be engaging in fraud.
The main investor who was involved in the 2018 dispute and negotiations — and who I regarded as largely “on the side” of those who left (though since the collapse they’ve emphasised to me they didn’t regard themselves as “taking sides”) — continued to invest in Alameda, though at a lower amount, after the dispute. This made me think that what was at issue, in the dispute, was whether the company was being well-run and would be profitable, not whether Sam was someone one shouldn’t work with.
The view of those that left was that Alameda was going to fail. When, instead, it and FTX were enormously successful, and had received funding from leading VCs like Blackrock and Sequoia, this suggested that those earlier views had been mistaken, or that Sam had learned lessons and matured over the intervening years. I thought this view was held by a number of people who’d left Alameda; since the collapse I checked with several of those who left, who have confirmed that was their view.[2]
This picture was supported by actions taken by people who’d previously worked at Alameda. Over the course of 2022, former Alameda employees, investors or advisors with former grievances against Sam did things like: advise Future Fund, work as a Future Fund regranter, accept a grant from Future Fund, congratulate Nick on his new position, trade on FTX, or even hold a significant fraction of their net worth on FTX. People who left early Alameda, including very core people, were asked for advice prior to working for FTX Foundation by people who had offers to work there; as far as I know, none of them advised against working for Sam.
I was also in contact with a few former Alameda people over 2022: as far as I remember, none of them raised concerns to me. And shortly after the collapse, one of the very most core people who left early Alameda, with probably the most animosity towards Sam, messaged me to say that they were as surprised as anyone, that they thought it was reasonable to regard the early Alameda split as a typical cofounder fallout, and that even they had come to think that Alameda and FTX had overcome their early issues and so they had started to trade on FTX.[3][4]
I wish I’d been able to clear this up as soon as the TIME article was released, and I’m sorry that this means there’s been such a long period of people having question marks about this. There was a failure where at the time I thought I was going to be able to talk publicly about this just a few weeks later, but then that moment in time kept getting delayed.
Sam was on the board of CEA US at the time (early 2018). Around that time, after the dispute, I asked the investor that I was in touch with whether Sam should be removed from the board, and the investor said there was no need. A CEA employee (who wasn't connected to Alameda) brought up the idea that Sam should transition off the board, because he didn't help improve diversity of the board, didn't provide unique skills or experience, and that CEA now employed former Alameda employees who were unhappy with him. Over the course of the year that followed, Sam was also becoming busier and less available. In mid-2019, we decided to start to reform the board, and Sam agreed to step down.
In addition, one former Alameda employee, who I was not particularly in touch with, made the following comment in March 2023. It was a comment on a private googledoc (written by someone other than me), but they gave me permission to share:
"If you’d asked me about Sam six months ago I probably would have said something like “He plays hardball and is kind of miserable to work under if you want to be treated as an equal, but not obviously more so than other successful business people.” (Think Elon Musk, etc.)
"Personally, I’m not willing to be an asshole in order to be successful, but he’s the one with the billions and he comprehensively won on our biggest concrete disagreements so shrug. Maybe he reformed, or maybe this is how you have to be.”
As far as I was concerned that impression was mostly relevant to people considering working with or for Sam directly, and I shared it pretty freely when that came up.
Saying anything more negative still feels like it would have been a tremendous failure to update after reality turned out not at all like I thought it would when I left Alameda in 2018 (I thought Alameda would blow up and that FTX was a bad idea which played to none of our strengths).
Basically I think this and other sections [of the googledoc] are acting like people had current knowledge of bad behaviour which they feared sharing, as opposed to historical knowledge of bad behaviour which tended to be accompanied by doomy predictions that seemed to have been comprehensively proven false. Certainly I had just conceded epistemic defeat on this issue."
They also thought, though, that the FTX collapse should warrant serious reflection about the culture in EA.
On an older draft of this comment (which was substantively similar) I asked several people who left Alameda in 2018 (or reduced their investment) to check the above six paragraphs, and they told me they thought the paragraphs were accurate.
Unrelated — I really like this comment + this other comment of yours as good examples of: "I notice the disagreement you are having is about an empirical and easily testable question, let me spend 5 min to grab the nearest data to test this." (I really admire / value this virtue <3 )