Most Expensive Rejection: CZ Won the Business Battle But 'Missed the Bus' on $20 Billion in AI

Original Title: "The Day CZ Missed the Best Investment of His Life, Crypto Missed AI"

Original Author: Azuma, Odaily Planet Daily

In 2014, with only 1 year of exposure to the concept of cryptocurrency, CZ made the most daring investment of his life — he sold his apartment in Shanghai and "all-in" purchased about 1500 BTC at a three-digit price. Twelve years later, if CZ had never sold, this investment would have brought him a hefty profit of over a hundred million dollars (peak return of about $189 million).

Compared to his subsequent achievement of founding Binance and becoming a leader in the industry, the returns from this investment are no longer significant to CZ. However, from an external perspective, this highly idealistic "all-in" move remains one of the most talked-about operations by CZ.

What is regrettable is that even CZ, who is firm in his beliefs and decisive in his actions, once missed out on an investment opportunity that could have brought profits a hundred times greater than the "selling-house-to-buy-bitcoin" investment.

Backtrack 1555 Days: The Fateful Acquisition

November 9, 2022, was a sleepless night for the cryptocurrency industry.

Just the day before, FTX, which had once been shining in the industry, suspended withdrawals due to a liquidity crisis, triggering rapidly escalating panic in the community. A musty smell of impending disaster had begun to spread in the market... The rest of the story is known to all — FTX collapsed, followed by a chain reaction of downfall, plunging the market into a long winter lasting several years.

In a parallel universe, the story could have taken a different turn. In the early hours of November 9, SBF and CZ successively made announcements that FTX had preliminarily agreed to be acquired by Binance.

SBF: Hi, everyone: I have some news to announce. Things have come full circle, and the first and last investors in FTX are the same group of people — we have reached a strategic transaction agreement with Binance (subject to due diligence).

CZ: FTX sought our help this afternoon. The exchange platform is currently facing a severe liquidity crisis. To protect users, we have signed a non-binding letter of intent and plan to fully acquire FTX to address the liquidity crisis. We will conduct a comprehensive due diligence in the coming days.

However, the acquisition ultimately fell through. Just one day later, the Binance team officially announced the abandonment of the acquisition citing "issues beyond our control," which also became the final straw that broke the FTX's back.

Did CZ really consider acquiring FTX? Was the hasty end to the acquisition saga intentional assistance or just a move to gauge the opponent's "health bar"? This may have already become a permanent mystery. From the outcome, it is clear that CZ single-handedly defeated the then-largest competitor, solidifying Binance's top position in the industry.

However, no one expected that the seemingly insignificant "side piece" in FTX's asset arsenal at the time would rapidly appreciate in the following years, with its value now far exceeding the total value of the remaining assets from the failed acquisition.

Once a "side piece," now an AI focus

In April 2022 (this being the official announcement date, with the actual deal closing in 2021), FTX made its most significant investment in the AI field—committing $500 million as the lead investor in an AI startup Anthropic's $5.8 billion funding round, reaching a peak ownership stake of 13.56%, which later diluted to 7.84% as Anthropic went through subsequent funding rounds.

It was an era when AI's full potential had yet to be unleashed. Just half a year later (late November 2022, the same month as FTX's downfall), OpenAI's ChatGPT emerged, marking the irreversible entry of the world into the AI "Age of Exploration." Anthropic, with its Claude product line (especially the programming-oriented subproduct Claude Code), continued to astonish the world, gradually becoming one of the most shining star companies of the AI era.

As Claude kept iterating, Anthropic's valuation continued to soar. Venture capitalists aggressively waved their cash, eager to board the Anthropic ship sailing towards an IPO. The latest market rumors indicate that Anthropic is entering the final stages of a new large-scale funding round, with the funding expected to exceed $20 billion (initially targeting $10 billion, but due to investor demand far surpassing expectations, the final amount is expected to double), with a valuation potentially reaching $350 billion, and the deal is set to close as soon as this week.

With a latest valuation of $350 billion, FTX's stake in Anthropic is now worth around $27.44 billion, enough to cover multiple times the reserve hole that led it to bankruptcy... But history has already been made, and the outcome has long been determined.

It's hard not to marvel at SBF's rare venture capital genius (besides Anthropic, he also seeded the now red-hot Cursor), but evidently he is not a qualified business operator, especially lacking risk management. CZ's portrait, on the other hand, is diametrically opposite; he is a masterful business operator, and Binance's dominance is inseparable from his multiple correct strategic decisions. However, CZ also often sees himself not as a traditional investor purely pursuing returns on investment, not trading coins, but rather aspiring to be an industry builder.

A Hasty Ending: This Was Supposed to Be the Best Intersection of Crypto and AI

You might wonder, what happened to FTX's equity in the end?

The ending is not complicated. After FTX went bankrupt, all assets, including the Anthropic equity, were disposed of by the FTX bankruptcy management team. In February 2024, the court approved the sale of this equity by the FTX bankruptcy management team; in March and June of the same year, the FTX bankruptcy management team sold a total of 29.5 million shares and 15 million shares for a total of over $1.3 billion.

As for the buyers of these equities, they mainly came from ATIC Third International Investment in Abu Dhabi and traditional financial institutions from Wall Street such as Jane Street and Fidelity. In other words, no company from the crypto industry got a piece of the pie.

Regarding whether these equities were deliberately undersold, or if there was any interest transfer under the guise of bankruptcy liquidation, it is no longer important for the crypto industry.

This Was Supposed to Be the Best Intersection of Crypto and AI. In an alternate timeline, regardless of whether these equities were in SBF's or CZ's hands, if the leading companies in the crypto world could have a certain degree of influence in the development of the most successful companies in the AI world, then there might be more innovative attempts around Crypto + AI, leading to unexpected outcomes.

The one who breaks his leg is not just CZ.

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