Can FTX revive again? Hedge fund manager and founder of Ikigai Asset Management, Travis Kling has hinted at the potential for FTX’s recovery from bankruptcy. Google’s massive $2 billion investment in artificial intelligence firm Anthropic could breathe new life into FTX.
Google’s investment has raised expectations. They will invest an initial $500 million with plans for an additional $1.5 billion injection over time.
Kling suggested that FTX’s bankruptcy might be on the brink of a full recovery.
FTX bankruptcy getting pretty close to a full recovery at this point. It’ll take years to pay out, but estate assets vs customer deposits prob about 1:1 now.
Travis Kling on X.
However, Ari Paul, founder of BlockTower Capital, urged caution. He emphasized that Anthropic’s valuation increase does not necessarily equate to cash. Paul observed, “Anthropic may or may not ever return cash, but could be a similar mistake to thinking FTX was solvent because of SRM and FTT holdings.”
The backdrop for this financial intrigue lies in FTX’s affiliate, Alameda Research’s initial investment of $500 million in Anthropic. This move, made just last year, has proved pivotal, as Anthropic has since emerged as a formidable AI player.
Anthropic is currently challenging OpenAI’s ChatGPT with its Claude2. The AI firm has impressively secured nearly $7 billion in funding over the past year. This has boosted its valuation from an initial $4.1 billion to a staggering $20 billion. This rise has pushed FTX’s stake in Anthropic over $4 billion.
What happening with Sam Bankman-Fried?
FTX’s former CEO, Sam Bankman-Fried (SBF), was facing criminal trial in New York in the midst of this development. SBF acknowledged his errors during his tenure, admitting that “a lot of people got hurt” when FTX declared bankruptcy last year. SBF highlighted the failure to appoint a risk manager as a pivotal mistake.
Shamelessly, SBF also placed blame on his former associates, Caroline Ellison, Gary Wang, and Nishad Singh, for their roles in FTX’s collapsd. He specifically pointed out that Ellison did not follow his guidance on Alameda’s risk hedging at FTX. However, Wang and Singh were under his supervision and they had the authority to make autonomous decisions.
Stakeholders in FTX and financial world watches the interplay between Google, Anthropic, and FTX with bated breath. The fate of FTX remains uncertain despite this positive news since there is no liquidity or cash, just numbers on paper.