‘He ended up in Tihar Jail’: Former SoftBank executive Alok Sama on his new book and costly mistakes

Alok Sama, the former SoftBank executive who oversaw multibillion-dollar deals and who is still cracking big deals as the chairman of a venture capital firm, is back with a new book. Firstpost caught up with him in his capacity as a writer. The author of the bestselling memoir The Money Trap is set to release his novel, The Lion’s Share, on November 23. 

In a conversation with Firstpost’s Binoy Prabhakar, Sama weighs in on his new book, the backlash in the US against Indian Americans, the concerns and opportunities about AI and his former boss, Masayoshi Son.

Edited Excerpts:

You wrote a well-received book about big deals and big money. One would think you had the powder dry to write another book about billionaires, boardroom battles or perhaps corporate espionage. Instead, you’re coming out with a novel. So why fiction?

An interesting choice of words. The Economist published a review of my book and called it a Rorschach test for readers, which I thought was a wonderful way to describe it. You call The Money Trap a book about big deals and big money. I don’t think of the book that way at all. I think it’s a book about a kid—that’s me at age 21—prone to the world of big deals and big money. That’s an important distinction because you could read the book, and many people see the glamour and the glitz, and that’s what they take away from it.

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But others have read it as a pretty harsh indictment of that culture. Perhaps both are equally true. I’ve tried not to be prescriptive, and anyone who is looking for a clear-cut conclusion is probably going to be disappointed. To me, that gets to the heart of why I want to write fiction, because fiction lives in this zone of ambiguity. There’s no clarity. That’s just life for you. To me, the interesting part of these journeys, mine included, is not the destination but the stories we tell ourselves as we go along the way. Fiction is what I wanted to do. It’s something I wanted to do for a very long time. I tried to do it when I went back to school for my master’s. It’s an adventure, and it’s immensely satisfying to finally be able to publish a work of fiction.

Your new book is said to be a darkly comic exploration of what you have become. Could you please elaborate?

I don’t know who said that. I think it was extrapolated from a social media post. Once again, there’s a key word you’re missing. I think the quote was “what I might have become,” and I’d emphasise the word “might.”

It’s the story of people: a middle-class kid goes to IIT and goes to the US, and the IITs, let’s face it, are, to some extent, training grounds for Silicon Valley. You go there and make it big in the US. That story is well known and well understood, not to take away anything from the Sundar Pichais and Satya Nadellas of the world. I have tremendous respect for them and their achievements.

The story that’s less talked about is that of people who go off the rails. At the extreme, people with strongly rooted family values who are incredibly well educated, with IIT and Harvard backgrounds, end up in jail. That’s a lot of what I’m trying to explore in this novel.

The book starts with the protagonist in Tihar Jail, recounting his story to a person who’s a caricature of Dawood Ibrahim. That’s not me. It’s not what I’ve lived through, and almost certainly never will. It’s a case study in what people with backgrounds similar to mine could turn into. Fiction allows you to take a lot of liberties in terms of where you end up. But the most interesting part to me is, again, not where you end up, but what you were thinking. What went through this person’s mind that got them to this point? I find that fascinating.

The protagonist is in Tihar Jail. Did you draw inspiration from your career as an investment banker? Perhaps you knew people who had everything going for them then made a costly mistake and saw things go downhill. Has all that somehow made its way into the book?

I think the answer to all of the above is yes. I know someone who was helpful in terms of research. He has nothing to do with Wall Street, but he’s someone in India I’ve known who ended up in Tihar Jail. He gave me a lot of interesting intelligence into what it’s like to be there. Hopefully, most readers won’t know the difference, but I’m told it is authentic.

I’ve also seen people fall from grace. The case of Rajat Gupta is the best known. I don’t know Rajat, and I’m not offering an opinion, but the facts are clear: this is someone who went to an IIT, attended a top business school, became CEO of McKinsey and then did a stint in jail. I’ve seen a few of those up close and personal, and I find it fascinating.

At the heart of this book is a question asked by the protagonist’s teenage daughter: “Why do good people do bad things?” I find that fascinating.

I know you did a course in creative writing at New York University. What’s your approach to writing?

I’m going to be nitpicky about your choice of words, but forgive me. I did that a lifetime ago—40 years, if you can believe it. I did an MBA in finance from the Wharton School. Nobody’s ever called that a course in finance. My experience at NYU was a 2.5-year degree in literature and writing, with a thesis requirement. I’ve never worked harder in my life. It wasn’t a course; it was a full-time degree programme. It was a huge commitment.

I went in with a great deal of humility. I was a student there, and I was older than every one of my professors. Sometimes I asked questions; other times, they did. From my perspective, I wanted to dedicate myself to writing with the same commitment and enthusiasm with which I approached my MBA degree way back in 1984.

It was an experience that allowed me to refine my writing voice and really study. The teachers there are some of the finest novelists in America. Being exposed to those people in a small classroom workshop context was absolutely phenomenal. I’m still finding my voice. It’s a discovery. This is my second book, and I’m already working on a third. Hopefully, there will be more to come.

Not long ago, in a column, you wrote that the best investment minds in Silicon Valley had steered clear of the hype around LLMs like ChatGPT and instead directed money towards AI and how it transforms enterprise. Hasn’t that changed in the last year or two?

I think the comment you’re referring to is that I’ve had a senior adviser role for Robert Pincus. They are absolutely among the finest minds, not just in Silicon Valley but everywhere in the world, including India, where they have a fantastic presence. I believe the reference was to Robert Pincus and how they steered clear of LLMs.

Statistically, so far, that hasn’t been a great decision. If you’ve invested in OpenAI or Anthropic, people haven’t taken their money out. But look at valuations: Anthropic is talking about going public at $2 trillion, and OpenAI is raising money at $1.25 trillion. That’s what was in the news today. If you’ve steered clear of LLMs, you’ve been wrong.

What’s also happened is that LLMs are moving beyond pure LLMs. The consumer subscription model is interesting, but the real money gets made at the enterprise level. Anthropic had the early lead there, and it’s amazing what those companies have done. Anthropic is a four- or five-year-old company, I believe, with run-rate revenue of $65 billion. That’s phenomenal. Google, after its first few years over the same time frame, was one-tenth the size.

These are truly extraordinary business models. But there are challenges along the way: the pace of enterprise adoption, cheaper alternatives, and token prices that are extraordinarily expensive at spot prices. There’s a real capacity bottleneck right now. It’ll be interesting to see how this all unfolds over the next few years.

You witnessed some of the biggest investment deals. Given the fears and concerns, are we looking at a tech revolution, or is it going to be a big bubble?

I don’t think it’s either-or. I think the answer is frequently both. Look at railways, going all the way back. Railways were transformational, yet there was an investment bubble. The internet was exactly the same thing.

Something fundamental is going on: a technological change that will revolutionise all our lives and every business. That’s not an exaggeration. It was a cliche in the late 1990s and early 2000s that every company was an internet company. I think we can safely say at this point that every company is an AI company.

You saw Barclays announce layoffs affecting five per cent of its workforce, with the CEO attributing them to AI-related efficiencies and workflow changes. Every enterprise and every business is affected. Even writing and authorship are facing challenges. How businesses cope with this challenge of AI will be interesting to watch across the board.

I think it’s very real. Individual valuations are an altogether different matter. The two things that concern me greatly are leverage and the risks associated with it. Leverage is dangerous. In my book, The Money Trap, I use this line, which is amusing, slightly politically incorrect and tongue-in-cheek: big tech avoids leverage the way Leonardo DiCaprio avoids women under 25. That was written two years ago. Since then—and this blows my mind when I think about it—big tech has borrowed upwards of $300 billion.

A lot of what’s going on involves leverage, and at the extreme. Microsoft, Google and Meta can afford to borrow a lot of money. But then you have business models like CoreWeave, which are completely reliant on financial engineering. That’s why you’re seeing serious stress. Credit default swap spreads have blown out. Debt is trading at 15 per cent or 16 per cent, suggesting there are a lot of question marks about the speed at which demand increases.

The demand is undeniable. The challenge is future development and how it matches up against cash flow. That becomes really challenging when you’ve got leverage to deal with. End-user demand at the enterprise and consumer levels, how it evolves, the utility people get, and how that matches up against token prices—those are the challenges of the next few years.

You’ll see mismatches, and those mismatches will become evident in quarterly results. You’ll see some major setbacks to valuations. I shouldn’t use the future tense: you’ve seen that today. Companies such as Cerebras, and even my former employer SoftBank, have seen their stock prices move. A major correction has already happened over the last few weeks.

I can’t let you go without hearing your thoughts on Masayoshi Son. What was it like working with him? What are your thoughts about him, and what did you learn from him?

He’s irrepressible. A lot of people think his appetite for risk is enormous. But I think the most important insight I can give you about understanding Masayoshi Son is this: when you think about his appetite for risk, remember that he’s all in on AI. In dollar terms, he’s the biggest single investor in OpenAI, with a commitment to building infrastructure. Even Arm, SoftBank’s biggest single holding, is fundamentally an AI company in terms of providing intelligence at the edge of the network.

Masa Son is a man who lives in the future. He thinks of himself as someone who’s living in the future, someone who has already read tomorrow’s headlines. His perception of risk is fundamentally different from yours and mine. He has no qualms about going all in, and that has proved dangerous in the past. But you can’t argue with one of the richest and most successful people in the world. I wouldn’t bet against him. Ever.

I also wanted to hear your thoughts about the rising hatred against Indians and Indian Americans in the US. What does it mean to be an Indian American entrepreneur in the US right now, given not just the hate but also the tough immigration laws under the Trump administration? Do you think the American dream is pretty much dead for Indian Americans?

Now you’re talking about something that’s very near and dear to my heart and, in many ways, is the genesis of not just the book I’ve just written, Blindside, but the future book too.

I have two kids who were both born in New York and live in New York City, and they’re American. So I have skin in the game, so to speak. It’s something I watch very carefully. I wrote an editorial for The Times in London about American exceptionalism. I think the title was “American Exceptionalism Was Built by Immigrants.”

I think the backlash against immigrants is understandable to some degree. I’ll go out on a limb and say the H-1B system is being abused. I think the vast majority—I think the number is 70 per cent—of H-1Bs were handed out to Indian employers. That’s not American companies employing Indians. So I think a bit of a reset is perhaps in order.

The entire issue has been politicised, not just in the US but elsewhere in the world, too. You see that in the UK and elsewhere in Europe. The immigration backlash is a phenomenon across the Western world, and I think it’s ongoing. It will absolutely be a lot harder for Indians to break into the US.

Having said that, from an opportunity perspective, India has its own issues. We’ve written about this, too. We simply don’t have enough opportunities in education and employment. The cockroach movement is another issue. These are all real issues. I’m watching carefully, and I find it very troubling.

My bottom line is that I don’t want to say the American dream is dead for Indians. I think it’s absolutely alive, but it will be a lot tougher. When it comes to targeting Indians purely on the basis of ethnicity, there should be no room for that. I’d like to think that the powers that be in the US understand that and will crack down on it. I have a lot of faith in America and its system.

I want to stay on that. One strand of commentary around the hatred against Indians is that many of them may want to return to India, creating an opportunity for the country. If you were to advise the Indian government, what should it do to facilitate their return and encourage a reverse brain drain?

There’s no near-term fix, sadly. If you want a clue, look at any ranking of the world’s top 100 universities—or the top 25, whatever number you choose. The top 100 is a big enough number, and you won’t find a single Indian institution. That is sad.

Look at AI, for example. China is producing exponentially more PhDs, even more than the US. It’s about investment in educational infrastructure. IITs are fundamentally undergraduate institutions. Until you’ve created that kind of infrastructure, replicating Silicon Valley is impossible. Stanford is the sun of that solar system, with everything that has happened around it.

Every country in the world struggles with this. But if I had to point to one thing and one thing only, I would say investing in educational infrastructure. That’s fundamental. Sadly, there’s no near-term fix.

I think the government embraces entrepreneurship, and there’s no shortage of incredibly talented people. I wrote about that in The Money Trap. I’ve dealt with a lot of them at SoftBank, and we backed many of them. There’s no shortage of Indian entrepreneurs or young entrepreneurial talent. In my experience during my time at SoftBank, the government went out of its way to welcome entrepreneurship. But there’s no short-term fix. I think it starts with educational infrastructure, and I just haven’t seen enough initiative around that.

In China, one other reason often cited for its success is the amount of money it spends on R&D. India spends comparatively much less. What are your thoughts on that?

China invests a phenomenal amount in infrastructure, and it has some phenomenal technology companies. Alibaba, in which SoftBank invested and which is a company I know well, and Tencent are world-class technology companies that invest aggressively in infrastructure.

So it’s not just the government. To a large extent, this is funded by the private sector. In India, once again, it goes back to educational infrastructure. We just haven’t had Indian entrepreneurs start genuine grassroots technology companies in the way that has happened in China.

With China, it’s not just the government; it’s happening in the private sector, too. It’s a result of foresight, because they’ve been investing in this not just over the last two, three, four or five years, but for the last 20 years.

You said you already have enough material for your next book. Could you reveal some details? And whether you deny it or not, I think it goes back to your creative writing course.

The third book is way too early to talk about, to be honest. In some ways, I think that in my writing, I’m exploring different versions of myself. This particular version involves an Indian kid who’s in the US and who cares about nothing at all. There’s a backstory to that.

He’s not in the world of finance or technology. He’s just chilling out, smoking weed and exploring life. That’s another side of me that might have been what I became. There’s a little bit of that journey going on there, but it’s way too early to talk about. I have no idea what direction that book is going to take. In my experience, writing involves a huge element of making it up as I go along.