OF COURSE, Trump’s AI Czar David Sacks Has ALSO Invested In AI

0:00We're so numb at this point to just the level of self-dealing in this administration that just not fully divesting from your VC fund when you go into a special appointed appointed position. is like, oh, that's small potatoes.

0:18Welcome back to the Newcomer Podcast. Tom Doton here. I'm joined by Eric Newcomer, Madeline Renbarger. We're talking now about David Sachs, a man of many opinions, both his own and the way people feel about him. I'm excited to get into this one because we've got thoughts. And the reason David is in the news is the New York Times on Sunday, of this week, I think it was Sunday, put out a big piece, big expose. Man, I sound like Tucker Carlson when I said that. I don't want to load it too much right now. They had an expose. It was apparently many months in the making where they were trying to fairly deliberately show the conflicts of interest that David Sachs has as the AI and cryptos are to the Trump administration with his ongoing role as a venture capitalist.

1:03He is the managing partner at Kraft Ventures. and basically the story lays out that while in this role, he has been advocating for kind of maximalist AI policies that, you know, do not burden AI with a lot of regulation. And then same with crypto, probably even more so with crypto. And he's also, you know, got these ongoing investments that are theoretically benefited by all of these policies. And just as like the last part of this recap, it was, you know, when the article came out, became a whole thing on Twitter. David Sachs called it a hit job and a hoax and said the New York Times was later spiraling.

1:42And you had all these VCs and founders rushing to defend David Sachs, saying how important he was to them and to their families and their children. And really one of the great men of all time, David Sachs. And then the reporters in the story, including Ryan Mack, who is known for getting into fights on Twitter, very vocally defending the story. And it was all kind of a mess. So that was my rundown of everything that happened over the last couple of days. But let's just start off with David Sachs, the guy, because he's been this figure for a long time. I mean, Eric, you were writing a lot about Zenefits back in the day, which was the first time David Sachs seriously crossed my radar.

2:20So I imagine you've been following the opinions about him for a while. I mean, what? All right. So, you know, David Sachs, member of the PayPal mafia, confidant of Peter Thiel. In some ways, the guy in the PayPal mafia who really did the work. I mean, I think he was the chief operating officer. And so he was often the one like really, really grinding. So he built this great network that includes some of the people circling the wagons for him after this New York Times story. He found a sort of early version of Slack called Yammer that sells for a good bit of money, establishes him as a successful entrepreneur.

3:00Though Yammer, which I believe purchased by Microsoft, it doesn't last as a product. I think it feels like sort of a hollow exit. One of these sort of people make money and then acquisition goes nowhere sort of deals. Yeah, I got introduced to him in this fight over Zenefits. Parker Conrad, now the CEO of Rippling, gets forced out. David Sachs and Andreessen Horowitz go to war with this founder, pinning all the blame on Parker Conrad. And yeah, I'd say that was a moment where I was deeply skeptical of Sachs. He's sort of ruthless in prosecuting the case against Parker. He brings in this guy, Lanny Davis, who is like real sort of, you know, DC fixer type, you know, lawyer PR guy just to go to war against Parker, who's not not really equipped for to have, you know, all the powers that be marshaled against him.

4:03And Sachs is just very, you know, lawyerly himself. A couple other, you know, key facts. I mean, David Sachs literally. Zenefits also crumbles. Right. It does not do well. Yeah, Saks takes over. He doesn't save the company. It's terrible. He passes it off to somebody else and the whole thing is a disaster. So they certainly don't save the company by ousting Parker. Um, to, you know, a couple other quick points on Saks. He, uh, he writes a book with Peter Thiel that says, you know, date rape isn't rape. So he, he's somebody who's, you know, uh, sort of conservative through and through. He's one of the four besties on the all in podcasts, along with Chamath Polihapitiya and Jason Kalkanis, uh, and David Friedberg.

4:56And he's the smug guy who thinks he's super smart. I think in reality, he's made a bunch of money on Solana. He's an investor. He started this firm, Kraft Ventures, that goes big on the cryptocurrency Solana, which obviously is known in the crypto world as sort of being an insider's insider sort of token. And then when Trump gets elected, he's supportive of the Republicans and Trump. When Trump gets elected, he becomes Trump's AI and crypto czar while keeping a foot still, still doing the podcast frequently still tied to his investment firm, right? He's still at Kraft. Yeah. He hasn't divested from, I mean, he's, he's, you know, he doesn't divest.

5:37He has, he's, he's claimed to have removed himself from some interests, but he has not left Kraft. He's a sort of free market capitalist type guy. And so he, you know, he's basically the industry guy that Trump brings in to boost AI and crypto. And then the New York Times set off investigating him. Yeah. And I mean, this was a very objective, dispassionate, for you at least, reading of David Sachs. I mean, he has developed this persona, and maybe it's just who he is. I've never met the guy, but extremely unpleasant. He likes to get in fights with people. He's extremely condescending, you know, very, um, triumphalist in, you know, the way that they kind of very late, uh, relatively late back Trump.

6:23And, you know, he, like the joke I would make is that he basically podcasted himself into an administration appointment. Right. Well, I think they tried, they, they would have preferred DeSantis, but then once they realized this Trump thing was going to happen again, right. They got posts a fundraiser for him, gets him as a guest on the all in podcast. And then as the article points out, they're able to use the podcast as a business to promote itself with the Trump administration. Madeline, you were at the Hill and Valley Conference, which gets mentioned in the New York Times article. That's an all-in branded event, more or less, and Trump is the guest of honor, right?

6:59Yeah. I attended their AI summit that they co-hosted with Hill and Valley. An interesting anecdote in the New York Times piece, which I didn't realize at the time, was that the summit was actually just going to be hosted by All In. And Susie Wiles thought that that was too deep of a conflict of interest and didn't look great. And so they had to scramble to find a more DC-focused co-host for this event. So it wasn't just a two-hour live podcast, which is what it was, or an all-day podcast. So they brought in the Hill and Valley guys that were known kind of tech government fixtures, but more government-leaning rather than tech-leaning to make it seem legitimate, which is quite funny.

7:40But it was a mingling of powerful people in government and different secretaries, like Secretary of Energy spoke. And they would just sit on the couch with the besties. And it was basically a live podcast. That is what it was. The thing about Sachs that always bothered me, before we even get into the article, beyond just his politics, which I think are reprehensible, is that there's so much phoniness presentation with his whole persona. I mean, this idea that he's just out there. Like a poor man's Tucker Carl. Yeah. It's like sort of disingenuous. He comes in with his like talking points on the podcast.

8:21He eats up airtime. Like nobody, he tries to find foils that don't really seem prepared to go toe to toe with him. Like, and you know, he also the all in dynamic is you've got David who's like partisan, Republican, talking the talking points. You've got David Friedberg who wants to talk science and stay out of it. You have Chamath Pollyhabitea who is total – was a Democrat, but clearly it was totally opportunistic and is just trying to sort of grift every which way. I've called him the scam in the arena. And then you have Jason Galcanis who I think at one point was sincerely a Democrat, but like no Democrat would hold him up as like, that's the guy we want to really go toe-to-toe with David Sachs.

9:03So David Sacks just, you know, basically has this forum. Exactly. Jason is Colms where it's like he's sort of the, you know, the guy. Controlled opposition. Easy to beat. Yes, exactly. Yeah. He represents the other side, but he's so hapless that you're just like, well, they must be wrong then. Right. If that's the opposition. David Sacks is like a constant foil, you know, in the newsletter. Like, I mean, one of my more viral tweets was I said, like, I think, honestly, Tom, you ghost wrote it for me. But before you worked for us, no libertarians in a bank run. No atheists in a foxhole, no libertarians in a bank run.

9:38He's this ultimate libertarian. And then the Silicon Valley Bank is at risk of going under and sort of screwing over Silicon Valley. And all of a sudden, All In and David Sachs are hysterical trying to get the government to step in. And so it's like total self-interested. And I just read every one minor thing that Sachs has been doing recently is he's been calling out the anthropic guys. I think this came up in our Reid Hoffman episode that we just published. He, you know, Sachs says basically all the anthropic stuff is insincere and that they're just trying to get government capture. And I think Reid's point of view, my point of view, was just that Sachs is so insincere in every point of view that he holds that he can't see somebody else offer a point of view and say, oh, that's their actual perspective that they're, they think there might need to be a little regulation.

10:27And so he just sees everything as some cynical strategy. Yeah. Even further than that, he is not divested from his firm and in the government administration and is complaining about Anthropik saying, hey, maybe we should have some regulation about this. You want it for your guys. You're in there. You just don't want it to be unfettered. I don't know. It just felt kind of hypocritical. Yeah. And as a last bit of insidery insight into all of this. When Mark Benioff was getting in the news for asking for San Francisco to be ruled by martial law, and there was a big media cycle around that, it was around the same time as Dreamforce was going on.

11:09And Benioff has this big dinner at Dreamforce at the top of Salesforce. Sorry. Yeah. At the top of Salesforce Tower. David Sachs was there. Dario from Anthropic was also there. That got a little awkward. Dario left before the dinner portion of the night. So make of that what you will. But David Sachs was seated at the same table as Mark Benioff. And then the next day, David Sachs tweets out in defense of Benioff, hey, are you thinking about maybe joining the Republican Party? We'd love to have you. As if there's some sort of authentic interaction where he's inviting him in. Things are always less organic on Twitter than they seem.

11:42Yeah. Always less organic. Yeah. But he knew it would be provocative and stuff like that. Anyway, so that's David Sachs. I think we're all in agreement. He's obnoxious. We don't agree with his politics. We have no desire to really defend him in any circumstance, except, unfortunately, the New York Times is article. Here we go. Yeah. I mean, I don't know even where to start with this thing. The attempt of the piece was to draw a connection between all of his holdings with the policies that he's advocating for and saying this guy is like conflicted out the ass. and I don't know. It's just another sign of corruption in the Trump administration.

12:19And I guess what I was really disappointed by, because I would have loved to see someone take a huge crack at David Sachs because I find him so obnoxious, is that there was nothing that they had in there that really was surprising to me. We knew going into his appointment that this was a representative of Silicon Valley, that the Trump administration was going to be a pro-crypto administration. That was very clear from his, from Donald, from Jr. You know, there was a lot of complaints around the Biden administration and kind of onerous regulation around AI. And that wasn't going to be the case here.

12:53And basically what the article is saying is like, well, because David Sachs holds stakes in AI companies and AI startups, therefore he's conflicted. And that's like informing his like self-enriching decisions. And I mean, people went ballistic over the headline. Silicon Valley's man in the White House is benefiting himself and his friends. David Sachs, the Trump administration's AI and cryptozar, has helped formulate policies that aid his Silicon Valley friends and many of his own tech investments. But it feels like the reality here is just like literally everything in tech is AI these days. He's a tech investor.

13:27He's bullish on AI. Therefore, it helps him. I mean, it's almost as if it's like the guy's pro AI and Nvidia is holding up the entire economy. Therefore, you know, he's like helping himself. It's like, it's, it's self-dealing only to the extent the New York Times has proven it. It's just sort of like, yeah, he's generally pro the big thing in tech and he's like aligned with that, but he, it doesn't have this sort of straight line corruption. You know, the Trump administration sets such a high bar for terrible self-dealing that this one seems not as exciting as just a Trump coin, you know. Right.

14:07We're so numb at this point to just the level of self-dealing in this administration that, you know, just not fully divesting from your VC fund, you know, when you go into a special appointed position is like, oh, that's small potatoes. But I will say one point in the story that I think we all, you know, covering this space could pick apart a little bit was that their evidence of the self-dealing in part was an analysis of all of the companies in Kraft's portfolio and how many of them were labeled as AI companies. And there were hundreds that were labeled as AI companies. Every startup right now is an AI company.

14:39Every single one in their marketing materials is including AI, even if, as we know, they're not really doing it. So just noting that their portfolio has a lot of mentions of AI to me didn't feel like the smoking gun that maybe those of us who are already not really primed to be on team David Sachs would be looking for. Anybody who follows like my media criticism will know, you know, I just don't think this kind of story makes sense anymore. Like I'd rather it as a screed against David Sachs from the man has no ethics, stands for everything bad in the world, sort of what we're giving here, which is like our perspective.

15:14But I think putting that perspective through the lens of like, you know, a view from nowhere neutral news story. Or he didn't place everything in a blind trust. Right. I mean, that would be the, the way to kind of, and previous presidents and administrations have done that. But like, we're just so far beyond that. Like we're dealing with an administration where cash Patel is using the FBI plane to travel, to see his girlfriend sing the national anthem at WWE events and going to like a literal boondoggle ranch. I mean, and those stories, by the way, do have impact, you know, like I, there is discussion now about cash Patel, maybe being on the outs with Trump.

15:51And I'm sure shit like this happens. So I don't even want to say like, oh, nothing, you know, journalists write anymore have any effect. I mean, it's certainly it's harder. But there are stories that do kind of affect these things. And yeah, I agree, Eric, like the sort of like, we laid out all the basically publicly available information in one narrative, and we want you to be shocked and appalled by it. It just sort of doesn't register anymore. And then I really wish that they could have pointed to specific policies that were like upsetting or controversial that only came into existence because of his ties to, you know, the industry and his holdings in AI.

16:32It feels like just generic deregulation stuff. I mean, the most interesting thing is like the interplay on China, but it doesn't go super deep on it. Yeah, I wanted more about that because I feel like, you know, Jensen has been cozying up so much to the Trump administration around these chip deals to be allowed to still sell chips to China. That was a huge piece of the Hill and Valley and all in event I went to was discussing this kind of policy. It seems like that is an area that could have been really fruitful and there could have been more scoops or, you know, deeper insights into what is driving the chip China policy.

17:09and if it's being entirely steered by people who want to do business in China, even though it's unpopular with the rest of the party. But that wasn't really there. Yeah. The last thing on this too is the one policy or stance that the administration has taken that I think is a little more controversial with AI is this belief that AI training should be allowed to train on any material that it wants to, that you don't really need to worry about compensation of the original creators of this material because basically robots have the right to read or AI has the right to read. Which pits one industry against another, right?

17:49It's like Hollywood publishing, caring about copyright, Disney versus tech, which doesn't. So in an administration ruled by big business, it still could go either way. And obviously, Saks is on the side of tech here. Right. And the courts are kind of mixed on which side they're going to fall on. And at some point, this probably will get to the Supreme Court. The New York Times did not lean into that at all. And I don't know if this is true, but it is a little bit concerning that New York Times also has an ongoing lawsuit against OpenAI over this exact fact, over whether or not it illegally trained on their articles.

18:29And I don't know if the reason it wasn't included is because of that. They often disclose that in articles about open AI, you know, New York times is sued and open, you know, it's New York. Yeah. Anyway. Um, but it just shows that like conflicts are sort of widely dispersed these days. And it, you know, I guess the next part that we should get to is like the response, which we talked about David Sachs, who called it a hoax and bullshit and they're spiraling. And that's not even surprising, but you saw basically every major member of the tech community tweeting out in support of David Sachs and how important he is.

19:02And I saw Greg Brockman. I saw Sam Altman. I saw, I don't know, are there any people that stuck out to you? Sam stuck out to me in particular, given the back and forth there. But yeah, it seemed like the heavy hitters. It was everyone. It was every VC that has a big Twitter presence. Which I thought circling the wagons was more troubling than the New York Times story. It It feels very much about how all these tech people are treating Trump, where it's like you go to the dinners, you say only positive things about him. When J.D. Vance, when they were running for office, basically said he didn't see any separation between big business and government.

19:42And I feel like this circling the wagons like, oh, we all need to pay homage to David Sachs. That's honestly part of what's really worrying with what this administration is doing. And so the sense that, yeah, everybody needed to come and like, you know, kiss up to David Sachs over like a silly New York Times story. I mean, it speaks. I mean, Tom, I think you were saying this earlier, but it speaks to the power of the New York Times that they're all like obsessed about it. But yeah, I hated the circling the wagons. I do have Sam's tweet if it's interesting to read. David Sachs really understands AI and cares about the US leading in innovation.

20:19I am grateful we have him. so just very i'm grateful we have him we're so grateful we're so grateful it's just very tim cook bringing you know gold to the white house i don't know um yeah yeah but the one who continually you know disappoints me in all of this is is mark benioff who basically tweeted the same shit his was a bit more specific to the new york times saying it was i'm reading his tweet now it was a distortion of his leadership um and he said it isn't journalism it's almost strategic sabotage dude you are the owner of time magazine you're and something that you take very seriously if you think that you want to you know be a steward of journalism you're going to have to deal with articles you don't disagree that you don't agree with um but to call it a sabotage and not journalism just shows to me that you're not a serious owner of a media company you are most stories are way weaker we're not i mean this is just like it's a reasonable effort you know i I didn't think the headline was that misleading.

21:17I mean, it is helping him, not in maybe the conspiratorial way you want, but yeah, it's a perfectly fine story. Yeah. It didn't hit the mark for me and it's easily defeated and deconstructed in retrospect, but to say it's not journalism and then a strategic sabotage is so antithetical to what an actual media owner who cares about journalism should be caring about that it completely undermines your credibility as that person. And the last part of this, for me at least, is you're still seeing texts circling the wagons around David Sachs, of course, but also Trump in general. And this is happening at a time that Trump's disapproval ratings are record highs.

21:57It's not looking good for Trump right now. It's looking real lame duck right now. Real lame duck. Yeah. Gallup, I think, is the worst it's ever been for him and for almost any president during their second term. There's a history of these things. They tend to get wiped out in the midterms. And they're basically, like you said, Madeline, like a lame duck for the rest of their administration. So everything that you were banking on, this whole tech Trump MAGA tech thing that has existed for the whole thing could fly off the rails in the next year. And everything that you have staked your reputation on could be gone.

22:26And so really at this moment where you, if you were smart, might be thinking like, we should back away because clearly these people don't have actual morals and closely held beliefs. So why don't just lean into that and say, oh, it looks like Trump isn't going too well right now. And maybe we should back off and see how we can work with the potential Democratic House and maybe even Democratic Senate. Instead, you're circling the wagon around David Sachs, who is obnoxious. You don't even really like all that much and are now going to be stuck with potentially 11 more months of effectiveness from the Trump administration and then uselessness.

22:58But it just shows that these guys have no, not even closely held beliefs and morals, but political instincts. The least you could do is recognize the state of affairs. Well, they're still in charge for, what, three more years? a lot, you know, maybe they're never going to leave office. You know, I don't know. Maybe they know something we don't, but, uh, yeah, I wish that were the bet. I know they're just like, we're still betting on like a, you know, democratic, yeah. Fascism, authoritarian autocracy. Yeah. Great. Um, just, just be open about that. Thank you for tuning into this week's episode of the podcast.

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