What we learned at the DealBook Summit
DealBook held its annual conference in New York yesterday, a packed day of high-level discussions with leaders from the world of politics, business and culture. Speakers included:
Sam Bankman-Fried, founder of FTX
Andy Jassy, C.E.O., Amazon
Volodymyr Zelensky, president of Ukraine
Larry Fink, C.E.O., BlackRock
Janet Yellen, U.S. Treasury secretary
Reed Hastings, co-C.E.O., Netflix
Mark Zuckerberg, C.E.O., Meta
Mike Pence, former vice president of the United States
Ben Affleck, actor, director and C.E.O., Artists Equity
Shou Chew, C.E.O., TikTok
Benjamin Netanyahu, Israeli prime minister-designate
Catch up with the whole day here. But first, here are some highlights.
Sam Bankman-Fried: “I’ve had a bad month.”
Would Sam Bankman-Fried speak or not? That was the big question on the minds of DealBook Summit attendees on Wednesday. In the end, the fallen crypto mogul made good on his promise in his first public appearance since the collapse of FTX, his trading exchange. The Times’s Andrew Ross Sorkin interrogated him for over an hour in an interview that generated headlines and tweets around the world.
S.B.F., as he’s known, addressed many questions (and dodged a bunch, too) about how his business went bust last month, a multibillion-dollar meltdown that could take years to sort through in bankruptcy courts. The ordeal has also wiped out much of his personal wealth. As he spoke, it became increasingly clear that the lost fortunes won’t be recovered. Ultimately, he said, he “screwed up.”
He said he “didn’t knowingly commingle” FTX customer funds with those of Alameda Research, the exchange’s trading arm, which served as a market maker on FTX, facilitating customer transactions and making its own very risky leveraged bets.
He denied he had knowingly committed fraud. “I did not ever try to commit fraud on anyone,” he said.
He said that he did not realize what a dangerous position the firms were in until it was too late.
He admitted that big mistakes were made, including poor if not nonexistent risk management and no oversight to protect customer accounts.
He said he was telling the truth — or that he was not aware of bending it. “I don’t know of times when I lied,” he told Andrew, and said he “was as truthful as I’m knowledgeable to be.”
He said the political donations he had made, which filings showed amounted to $40 million, were not meant as an attempt to buy access to lawmakers.
Watch the full interview here and read the full transcript here.
HERE’S WHAT’S HAPPENING
Salesforce’s co-C.E.O. Bret Taylor is stepping down. The unexpected departure, which is set to go into effect in January, means that the co-founder Marc Benioff will again be the lone chief executive as the business software giant faces a downturn in corporate I.T. spending. Taylor, the architect of Salesforce’s more than $27 billion acquisition of Slack, will be leaving to found a new company.
There’s no risk that Twitter will be pulled from the Apple App Store, Elon Musk says. The billionaire Twitter owner said on Wednesday that he had met with Apple’s C.E.O., Tim Cook, and received reassurances that Apple had “never considered” removing the social media platform from its apps marketplace. Such a move would have cut Twitter off from the billions of people who use Apple products.
Jay Powell, the Fed chair, signals an end to jumbo interest rate increases. Stocks rallied on Wednesday on the news that the central bank could be set to slow the pace of how fast it raises borrowing costs at its meeting this month. The Fed has lifted interest rates to a range of 3.75 to 4 percent last month from near zero as recently as March.
Reed Hastings: “I didn’t believe in the ad-supported tactic for us. And I was wrong about that.”
Reed Hastings, the C.E.O. of Netflix, said he regretted not launching an advertising-supported tier for the streaming service sooner, saying he had failed to appreciate the pent-up demand from brands looking to appeal to the 18- to 49-year-old demographic. “And I wish we had flipped a few years earlier on it,” he said.
Mr. Hastings also defended Musk’s contentious acquisition of Twitter, saying he was “excited” to see what the Tesla C.E.O. does with the social media platform. “Elon Musk is the bravest, most creative person on the planet,” he said, adding, “I’m 100 percent convinced that he is trying to help the world in all of his endeavors.”
Mark Zuckerberg: “The fact that companies have to deliver their apps exclusively from platforms controlled by competitors — there is a conflict of interest there.”
Mark Zuckerberg, the Meta chief executive, said that Apple had too much power as a gatekeeper for apps in its marketplace. Compared with other platforms like Google Play or Windows, he said, Apple “is the only one where one company can control what apps get on the device,” and that is not “sustainable or good.”
Meta’s stock price is down more than 60 percent this year as revenues fall amid a broad digital advertising slump. Another factor hitting the firm: Privacy features introduced by Apple last year have made it more difficult for social media apps like Facebook to target their users with ads.
Janet Yellen: “It’s a Lehman moment within crypto.”
Treasury Secretary Janet Yellen called for more regulation of the cryptocurrency sector, labeling the collapse of Mr. Bankman-Fried’s FTX a “Lehman moment” for the industry and reiterating her skepticism about the industry.
“I think everything we’ve lived through over the last couple of weeks, but earlier as well, says this is an industry that really needs to have adequate regulation, and it doesn’t,” she said, adding that it was fortunate that the problems had not spilled over to the mainstream financial sector.
“And crypto is big enough that we’ve had substantial harm of investors and particularly people who aren’t very well-informed about the risks that they’re undertaking, and that’s a very bad thing,” she said.
Larry Fink: FTX will force a rethink in the V.C. world
Larry Fink, the C.E.O. of BlackRock, did not hold back when asked about the failure of FTX. He said the executives there may be guilty of a kind of “misbehavior of major consequence.” But he also said venture capitalists, who helped fund the exchange, bore at least part of the blame. He said BlackRock had invested $24 million in FTX.
Fink also predicted the downfall of FTX would cause venture capital firms to rethink where they put their money. “It’s not going to go to all this stuff that provided us good utility to get food quicker, or find a taxi sooner,” Mr. Fink said. “I think it will be much more hard science, and require a lot more technical understanding.”
Volodymyr Zelensky: “If you want to understand what Russia has done here, come to Ukraine and you will see this with your own eyes.”
President Volodymyr Zelensky of Ukraine hit out at Musk’s peace proposal to resolve the war there, inviting the Tesla C.E.O. to visit his country to see the damage for himself before making any pronouncements about it.
“I don’t know if somebody’s making influence on him or he is making those choices himself,” he said when asked about the entrepreneur, who in October outlined a plan that would involve Ukraine ceding territory to Russia. “If you want to understand what Russia has done here, come to Ukraine and you will see this with your own eyes,” he said, adding, “and after that, you will tell us how to end this war, who started and when we can end it.”
Mr. Zelensky added that he didn’t believe Russia would use nuclear weapons in the war, saying the West’s biggest concern should be President Vladimir Putin’s military expansionist ambitions, warning that if he succeeded in Ukraine, neighboring democracies could be next.
Andy Jassy: “I think when you have unions, you end up with this ‘us versus them’ mentality.”
The Amazon C.E.O. Andy Jassy said the company’s fight with staff members over unionizing was “far from over,” claiming that a vote on Staten Island to form the first U.S. labor union at the tech giant was plagued by “irregularities.”
“That has a real chance to end up in federal courts,” he said.
Mr. Jassy added that the company didn’t like that unions were “bureaucratic,” echoing comments he had made in another interview with Andrew that the National Labor Relations Board said violated labor law.
That sentiment “I thought was fairly noncontroversial and straightforward,” he said, “but I guess you’re not allowed to say that, or some people think you’re not allowed to say that.”