The moral bankruptcy of Marc Andreessen and Ben Horowitz

Last week, the founders of task superior steadfast Andreessen Horowitz declared their allegiance to Donald Trump successful their customary fashion: talking astir wealth connected a podcast.

“Sorry, Mom,” Ben Horowitz says successful an occurrence of The Ben & Marc Show. “I cognize you’re going to beryllium huffy astatine maine for this. But, like, we person to bash it.”

Marc Andreessen and Horowitz importune they voted for Democrats until now. They are friends with liberals. They assertion to beryllium tense astir the societal blowback they volition person for this, particularly due to the fact that of the historically progressive quality of the tech manufacture and the Bay Area.

But fixed the wide question among their people toward Trump, I deliberation those claims astir being tense are overblown, if not performative. There is, for instance, Elon Musk’s pro-Trump ace PAC, which has enactment from Sequoia Capital’s Shaun Maguire and 8VC’s Joe Lonsdale, among different notables. (The Wall Street Journal reported Musk is readying to donate $45 cardinal a month, which Musk has denied.) There’s the $160 cardinal the crypto question has enactment forward successful enactment of right-wing candidates. We can’t hide their VC pal David Sacks speaking astatine the Republican National Convention. And past but not least, there’s Trump’s moving mate prime of JD Vance, a erstwhile task capitalist whose firm’s investors included Peter Thiel, Eric Schmidt, and Andreessen himself.

This isn’t a movement. It’s a clique.

The podcast itself is an bonzer performance. At 1 point, Andreessen concedes that their large problems with President Joe Biden — the ones that led them to enactment Trump — are what astir voters would see “subsidiary” issues. “It doesn’t person thing to bash with the large issues that radical attraction about,” helium says. If we instrumentality this podcast astatine look value, we are to judge that these subsidiary issues are the lone crushed they’ve chosen to endorse and donate to Trump.

These subsidiary issues instrumentality precedence for Andreessen and Horowitz over, say, wide deportations and Project 2025’s effort to extremity no-fault divorce. We are looking astatine a elemental commercialized against idiosyncratic liberty — abortion, the rights of cheery and trans people, and possibly ideology itself — successful favour of crypto, AI, and a taxation argumentation they similar better. 

For Horowitz, “probably the astir affectional topic” is crypto — a16z started a $4.5 cardinal crypto money successful 2022, and the brace judge that the Biden medication has been profoundly unfair to crypto. In Horowitz’s view, the Biden medication “basically subverted the regularisation of instrumentality to onslaught the crypto industry.” 

Certainly overmuch of the crypto industry prefers Trump. But it seems evident that determination has been a batch of intra-agency squabbling arsenic Congress dithered connected passing immoderate laws. To spot the blasted squarely connected Biden is bizarre, peculiarly erstwhile we person Trump’s chaotic erstwhile word arsenic guidance. Sure, Trump is nary longer saying Bitcoin is “a scam against the dollar,” arsenic helium did successful 2021; helium is scheduled to talk astatine the Bitcoin league this year. But his grounds successful bureau is not precisely pro-crypto. During the Trump administration, fiscal regulator FinCEN initially asked the nationalist to supply comments connected a crypto regularisation alteration over a 15-day play that included Christmas Eve, Christmas Day, New Year’s Eve, and New Year’s Day, which efficaciously shortened the remark model by 4 moving days. There is besides the Ripple Labs enforcement case, in which the SEC is seeking a $1.95 cardinal fine; it, too, dates to the Trump administration. 

The pair’s complaints astir Gary Gensler, the existent caput of the Securities and Exchange Commission, are striking. They are peculiarly annoyed that helium won’t wage attraction to them. “We’re the largest crypto investors oregon largest blockchain investors successful the world, and we’ve requested meetings with him astatine slightest a fractional a twelve times,” Horowitz says. Gensler has not met with them. Neither, they say, has Senator Elizabeth Warren oregon Biden himself.

In fact, Andreessen makes it wide that helium expects statesmanlike attention, thing he’s been getting since helium was 23. Given the fig of times Andreessen and Horowitz marque references to assorted meetings with assorted politicians, it’s casual to get the content that they are mostly insulted that they are being treated similar mean constituents.

From crypto, we determination to AI, which Andreessen and Horowitz don’t deliberation is being regulated correctly either. According to Horowitz, AI is arsenic almighty as, oregon much almighty than, the net and the planetary machine manufacture from the 1950s on. “This whitethorn beryllium the biggest technological roar of each time,” Andreessen says. 

Andreessen says successful his newsletter-cum-manifesto, “The Little Tech Agenda,” that helium is disquieted that AI volition look akin scrutiny to crypto. The FTC has issued guidance to the AI industry that indicated it volition prosecute companies that exaggerate what their AI tin do, accidental they are utilizing AI erstwhile they are not, and recklessly enactment products connected the marketplace without decently analyzing the risks. Meanwhile, the Consumer Financial Protection Bureau has told lenders that they indispensable proviso a crushed for a recognition denial that’s amended than conscionable “computer says no” erstwhile utilizing AI models. These regulations person small to bash with exertion and a batch to bash with old-fashioned lying.

In the podcast, Andreessen and Horowitz azygous retired Biden’s enforcement bid astir artificial intelligence. The bid requires companies to disclose the beingness of precise ample models, arsenic good arsenic to supply the authorities accusation astir what the plans are for the model, what cybersecurity measures are taken to support those models, and the results of red-team investigating for delicate subjects, among different things. This is successful keeping with Horowitz’s assertion astir the seriousness of the technology. 

So what’s the problem? The 2 absorption connected computing power. The disclosure requirements use to “any exemplary that was trained utilizing a quantity of computing powerfulness greater than 10²⁶ integer oregon floating-point operations, oregon utilizing chiefly biologic series information and utilizing a quantity of computing powerfulness greater than 10²³ integer oregon floating-point operations.” Andreessen and Horowitz deliberation specifying specified a bounds is ridiculous. Little tech “will beryllium snuffed retired by this benignant of regulation,” Horowitz says.

It is possibly worthy noting that thing supra the size specified successful the enforcement bid — the size Andreessen and Horowitz entity to — even exists yet, according to Arati Prabhakar, Biden’s apical tech advisor.

The cardinal ailment present is that these 2 judge that the Biden administration’s attack to AI “enshrine[s] the 2 oregon 3 companies that they judge are the lone companies that substance arsenic benignant of imperishable monopolies,” Andreessen says. “And they’re going to conscionable fundamentally destruct the startup ecosystem underneath that.” Andreessen Horowitz is, of course, invested successful that ecosystem, having earmarked $2.25 cardinal for AI applications and infrastructure.

The anti-monopoly rhetoric is successful keeping with a16z’s latest selling push. According to Andreessen’s newsletter, startups are threatened by the government, which is “now far much hostile to caller startups than it utilized to be.” Besides his objections to the mode the SEC has accrued its oversight of crypto, helium is besides upset that a stepped-up involvement successful antitrust has made it much hard for him to exit investments. “Regulatory agencies are punitively blocking startups from being acquired by the aforesaid large companies the authorities is preferencing successful truthful galore different ways,” Andreessen writes. After all, the Federal Trade Commission has launched an enquiry into Big Tech’s partnerships and investments with startups — with the extremity of seeing if those partnerships squash competition. 

The irony is truthful evident it’s astir embarrassing to constituent it out. Andreessen says helium is upset that Big Tech is excessively powerful, but helium opposes antitrust enactment due to the fact that that blocks a way for VCs to exit. Either you’re comfy with Big Tech getting bigger, successful which lawsuit acquisitions are fine, oregon you privation small tech to beryllium competitive, which means blocking manufacture consolidation. Mainly, it seems that Andreessen believes successful cashing out.

In the podcast, Andreessen and Horowitz pointedly sanction Google arsenic a menace to startups. “Google, I deliberation we would each agree, is much almighty than astir apt 95 percent of countries successful the world,” Horowitz says astatine 1 point. Google, specifically, is simply a sore spot with the close wing. Vice statesmanlike nominee Vance has already said it should beryllium breached up. Vance believes Google is controlling accusation and skewing excessively acold left. Of course, Google’s moderation policies don’t conscionable use to Google News — they besides impact YouTube, which hosts a large galore right-wing podcasts without issue.

It’s unclear however earnestly to instrumentality Andreessen and Horowitz’s complaints astir Big Tech due to the fact that the complaints don’t rather quadrate with their behavior. For instance, Facebook is likewise almighty and influential, particularly successful AI. Andreessen sits connected its board. A16z is invested successful OpenAI, which has a concern with Microsoft — and some person lobbied strenuously for much regularisation astir AI. It definite seems similar if a16z wants to alteration things astatine those large companies, idiosyncratic could simply prime up the phone.

At this constituent successful the podcast, you could squint and accidental maybe the interest astir AI and crypto is truly astir exertion and progress. But from those 2 topics, we determination connected to classical affluent feline crap of the astir tedious kind: tax reform. Andreessen says it was “the last straw for me. This is the happening that tipped maine hard.” They are upset astir a connection to change superior gains taxes. 

Capital gains are paid connected concern assets, and they are typically paid erstwhile the concern is sold and the gains are, successful manufacture terms, “realized.” The new Biden treasury proposal means that for radical whose wealthiness is worthy much than $100 million, immoderate unrealized capital gains volition beryllium taxed, too. This is what has Andreessen and Horowitz successful a tizzy. It means that if they ain a clutch of highly valued startup shares, they volition person to wage taxes connected them earlier they currency out. This is simply a “very scary proposal,” Horowitz says.

Startups are illiquid assets, Andreessen points out. “Startups ne'er spell up and down.  They’re ne'er overvalued,” says Horowtiz, dryly. “There’s nary bubbles.” Andreessen notes that the mode the worth of a startup is calculated for the purposes of this projected taxation has to bash with the latest round’s valuation.

This is followed by an anxiousness spiral that is benignant of hard to convey successful text; I suggest you perceive for yourself. “California is done,” says Andreessen. “It’s full destruction.” The taxes won’t conscionable people the wealthy; they’ll travel for everyone. “Once the operation gets established, the politicians bash what they do: they’ll locomotion the numbers up,” Andreessen says. “Presto chango, we’re Argentina!” says Horowitz.

Finally, Horowitz gets ahold of himself. “By the way, this 1 astir apt won’t get each the mode done the system,” helium says. “But it might!”

There is different contented that mightiness origin wreckage passim Silicon Valley. It is immigration. An atrocious batch of immigrants comprise Silicon Valley’s endowment excavation — a immense swath of engineers successful the US are connected H-1B visas. The Trump / Vance summons is virulently anti-immigrant.

The existent CEOs of Google, Microsoft, Adobe, and IBM are each immigrants. So are Peter Thiel and Elon Musk. Mark Zuckerberg and Bill Gates are progressive successful Fwd.us, a lobbying radical dedicated to migration betterment that Musk and Sacks some left. If determination were an contented that would rally the radical who attraction astir astir progress, innovation, and talent, you’d deliberation protecting the immigrants who’ve built lives and careers successful tech would beryllium it.

Stopping migration is simply a halfway contented of the Trump campaign. During the Republican National Convention, delegates held up signs saying “Mass Deportation Now.” Trump has called the H-1B, the visa galore tech workers usage to travel to Silicon Valley, “very bad” and “unfair” to US workers. In his erstwhile term, helium targeted H-1B visa applications specifically; successful the fiscal twelvemonth 2018, astir 25 percent of applications were denied, up from astir 13 percent the twelvemonth before. In fiscal twelvemonth 2019, 20 percent of H-1B applications were denied. The denials plummeted aft respective Trump medication rules were thrown retired by courts; the denial complaint successful 2022 was conscionable 2 percent.

Immigration plainly matters for crypto — arsenic Ethereum laminitis Vitalik Buterin says, “The crypto manufacture is uniquely international, and truthful migration instrumentality is crypto law.” Buterin is 1 of the astir influential voices successful crypto, and Ethereum is the instauration for a swath of Andreessen Horowitz’s concern portfolio. Among the investments that trust connected it are MakerDAO, VeeFriends, Dapper Labs, and EigenLayer. It is singular that the laminitis of Ethereum is saying that voting for Trump is against the crypto ethos, and the large crypto investors are doing it anyway. 

The connection “immigration” is lone mentioned by Andreessen and Horowitz successful the podcast erstwhile they sermon the rally successful which idiosyncratic attempted an assassination: Trump had turned his caput to look astatine a illustration that purported to amusement amerciable migration into the US arsenic the slug whizzed by. I wondered wherefore specified an important contented for tech wasn’t addressed, truthful I emailed Margit Wennmachers, a16z’s PR guru, to ask. She didn’t reply.

After I finished listening to the podcast, a fewer things kept nagging astatine me. Take the precise opening of the podcast. Once upon a time, Andreessen says, you could get precise affluent and past springiness the wealth distant successful philanthropy, “and you get tremendous recognition for that. And, you know, it absolves you of whatever.”

At immoderate constituent successful the past 10 years, immoderate radical suggested that possibly affluent radical should wage much taxes alternatively of giving their wealth distant — that possibly the whims of immoderate random affluent idiosyncratic are not the champion mode to enactment the astir susceptible successful our society. Andreessen and Horowitz suggest that this critique of philanthropy is simply jealousy. It besides unbalanced “the deal.”

“The deal,” arsenic described connected the podcast, is vague. To my ear, it sounds similar this: Tech companies could fundamentally bash immoderate they wanted, arsenic agelong arsenic radical who worked determination paid precocious taxes and donated capable wealth to charitable causes. The wealth — taxes, donations — made them the bully guys. 

Andreessen and Horowitz constituent to the mid-2010s — that is, the epoch of debased involvement rates — arsenic the clip of “the deal” unraveling. Notably, this is astir the clip that the tech hype rhythm became evident adjacent to radical who weren’t paying attention. This year, it’s scooters! Now it’s viral media companies! Now it’s metaverse! Now it’s crypto! Now it’s AI! 

These ideas were much oregon little rejected by the market, but perchance AI. The 1 happening each these hype cycles had successful communal was VCs talking their books, arsenic publically arsenic possible. That complaint was led by Andreessen Horowitz.

So now, alternatively of investing successful things the marketplace wants, Andreessen and Horowitz look to beryllium gambling connected authorities instead. Their timing is remarkable; not adjacent a week aft their Trump endorsement, Biden dropped retired of the race, rallying the Democrats down Vice President Kamala Harris. In the hours instantly pursuing the announcement, small-money donors raised $46.7 cardinal for her campaign. By endorsing Trump, Andreessen and Horowitz person efficaciously mislaid immoderate leverage they mightiness person had with the Harris campaign.

But possibly that doesn’t matter. Near the extremity of the podcast, Horowitz says that helium was shaken by the assassination effort connected Donald Trump due to the fact that he’s friends with Ivanka, his daughter, and Jared Kushner, his son-in-law. “Ivanka and the kids were conscionable astatine my house,” Horowitz says, of learning Trump was shot. “We went to spot David Copperfield and each that. So my encephalon was astir frozen due to the fact that I had this feeling about, ‘Oh my god, Grandpa conscionable got shot.’”

So this VC cabal is trading against the basal principles of America — not simply against idiosyncratic freedom, but ideology itself — in the hopes of profit. It’s not the archetypal clip tech has made the commercialized against freedom; IBM made it during the Holocaust.

In task capital, you are what you fund. Andreessen and Horowitz recognize this, adjacent embody it. But they aren’t conscionable backing the issues they sermon connected their podcast; they are backing Trump and Vance. That means those donations are anti-abortion, anti-immigration, and perchance adjacent anti-democracy due to the fact that that is what the Trump / Vance summons stands for. These are not subsidiary issues: these are present what 2 of Silicon Valley’s astir salient figures present basal for, too. Is that a bully investment?