The Day CZ Missed the Best Investment of His Life, Crypto Missed AI

Original | Odaily (@OdailyChina)

Author | Azuma (@azuma_eth)

In 2014, CZ, who had only been exposed to the concept of cryptocurrency for a year, made the most daring investment of his life — he sold his apartment in Shanghai and "went all in" on approximately 1,500 BTC at a three-digit price. Twelve years later, if CZ had never sold, this investment could have yielded hundreds of millions of dollars in substantial profits (peak returns around $189 million).

Compared to his subsequent achievement of founding Binance and rising to become an industry leader, the profit from this investment is insignificant to CZ. However, from an external perspective, this highly idealistic "all-or-nothing" bet remains CZ's most talked-about move.

Yet, what's lamentable is that even CZ, with his firm convictions and decisive actions, once missed out on an investment with potential profits a hundred times greater than "selling a house to buy Bitcoin" in a highly dramatic fashion.

Rewind the Clock 1555 Days: That Aborted Acquisition

November 9, 2021, was a sleepless night for the cryptocurrency industry.

Just the day before, FTX, which was once at the peak of its glory in the industry, suspended withdrawals due to a liquidity crisis. Panic within the community escalated rapidly, and the damp, ominous smell before a storm began to permeate the market... The subsequent story is well-known: FTX collapsed spectacularly, triggering a domino effect that brought down many others, plunging the market into a prolonged winter that lasted for years.

In a parallel universe, the story could have taken a different turn. In the early hours of November 9, SBF and CZ issued statements one after another, announcing that FTX had reached a preliminary acquisition agreement with Binance.

SBF: Hey all: I have a few announcements to make. Things have come full circle, and FTX's first and last investors are the same: we have come to an agreement on a strategic transaction with Binance (subject to DD).

CZ: This afternoon, FTX asked for our help. There is a significant liquidity crunch at the exchange. To protect users, we signed a non-binding LOI, intending to fully acquire FTX.com and help cover the liquidity crunch. We will be conducting a full DD in the coming days.

However, the acquisition ultimately fell through. Just one day later, Binance officially announced its withdrawal from the deal, citing "issues beyond our control," which became the final straw that broke FTX's back.

Did CZ ever genuinely consider acquiring FTX? Was the hastily concluded acquisition farce a sincere attempt at rescue, or merely a ploy to gauge the opponent's "health bar"? This may remain a mystery forever. From the outcome, CZ personally defeated his biggest competitor at the time, solidifying Binance's position as the industry leader.

But no one could have predicted that an inconspicuous "side bet" in FTX's asset portfolio back then would rapidly appreciate in value over the next few years. Today, its value has even far exceeded the total value of all remaining assets from that failed acquisition.

From a "Side Bet" to the AI Spotlight

In April 2022 (this is the official announcement date; the transaction was actually completed in 2021), FTX made its most significant investment in the AI field — leading a $580 million funding round for AI startup Anthropic with a $500 million investment. Its equity stake once reached as high as 13.56%, later diluted to 7.84% as Anthropic completed multiple subsequent funding rounds.

That was an era before AI's full potential had exploded. Just six months later (in late November 2022, the very month FTX imploded), OpenAI's ChatGPT burst onto the scene, irreversibly ushering the world into the "Age of Exploration" for AI. Anthropic, with its Claude series of products (especially the coding-focused Claude Code), repeatedly astonished the world, gradually becoming one of the most dazzling star companies of the AI era.

As Claude continuously iterated, Anthropic's valuation also kept climbing. Capital frantically waved cash, desperate to secure a seat on Anthropic's ship sailing towards an IPO. The latest market rumor is that Anthropic is in the final stages of a new large-scale funding round, expected to exceed $20 billion (originally planned to raise $10 billion, but investor demand far exceeded expectations, potentially doubling the final amount). Its valuation could reach as high as $350 billion, with the deal potentially closing as early as this week.

Calculated at the latest rumored valuation of $350 billion, the value of FTX's former stake in Anthropic would be approximately $27.44 billion, enough to cover the reserve shortfall that led to its bankruptcy multiple times over... But history has already happened, and the outcome is settled.

It's hard not to marvel at SBF's rare talent as a venture capitalist (besides Anthropic, he also invested in the now-hot Cursor in its seed round), but he was clearly not a competent business operator, especially lacking in risk control. CZ's profile is the complete opposite. He is a master at operating a business; Binance's dominance is inseparable from his many correct strategic decisions. But CZ also often positions himself not as a traditional investor solely pursuing returns; he doesn't trade cryptocurrencies and prefers to be a builder for the industry.

A Hasty Ending: This Could Have Been the Best Intersection of Crypto and AI

You might wonder, what happened to those FTX equity holdings in the end?

The ending is not complicated. After FTX's bankruptcy, all assets, including the Anthropic equity, were handled by the FTX bankruptcy estate. In February 2024, the court approved the estate's plan to sell these shares; in March and June of the same year, the FTX estate sold 29.5 million shares for a total of $884 million and 15 million shares for $450 million, respectively, totaling over $1.3 billion in sales.

As for the buyers of these shares, they were primarily Abu Dhabi's ATIC Third International Investment and traditional financial institutions from Wall Street like Jane Street and Fidelity. In other words, no crypto-native companies got a piece of the pie.

Whether these shares were deliberately sold at a discount or if there was any improper benefit transfer under the guise of bankruptcy liquidation is no longer important for the crypto industry.

This could have been the best intersection of Crypto and AI. In another worldline, regardless of whether these shares were held by SBF or CZ, if a leading enterprise from the crypto world held significant influence in the development of one of AI's most successful companies, there could have been more innovative attempts around Crypto + AI, potentially yielding unexpected fruits.

The one slapping their thigh in regret isn't just CZ.