The moral bankruptcy of Marc Andreessen and Ben Horowitz

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

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

Marc Andreessen and Horowitz insist they voted for Democrats until now. They are friends pinch liberals. They declare to beryllium tense astir nan societal blowback they will person for this, particularly because of nan historically progressive quality of nan tech manufacture and nan Bay Area.

But fixed nan wide activity 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 support 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 nan $160 cardinal nan crypto activity has put forward successful support of right-wing candidates. We can’t hide their VC pal David Sacks speaking astatine nan 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 awesome problems pinch President Joe Biden — the ones that led them to support Trump — are what astir voters would see “subsidiary” issues. “It doesn’t person thing to do pinch nan large issues that group attraction about,” he says. If we return this podcast astatine look value, we are to judge that these subsidiary issues are nan only logic they’ve chosen to endorse and donate to Trump.

These subsidiary issues return 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 waste and acquisition against individual liberty — abortion, nan authorities of cheery and trans people, and possibly populist itself — successful favour of crypto, AI, and a taxation argumentation they for illustration better. 

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

Certainly overmuch of nan crypto industry prefers Trump. But it seems evident that location has been a batch of intra-agency squabbling arsenic Congress dithered connected passing immoderate laws. To spot nan 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 nan dollar,” arsenic he did successful 2021; he is scheduled to speak astatine nan Bitcoin convention this year. But his grounds successful agency is not precisely pro-crypto. During nan Trump administration, financial regulator FinCEN initially asked nan nationalist to supply comments connected a crypto norm alteration over a 15-day play that included Christmas Eve, Christmas Day, New Year’s Eve, and New Year’s Day, which efficaciously shortened nan remark model by 4 moving days. There is besides nan Ripple Labs enforcement case, in which nan SEC is seeking a $1.95 cardinal fine; it, too, dates to nan Trump administration. 

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

In fact, Andreessen makes it clear that he expects statesmanlike attention, thing he’s been getting since he was 23. Given nan number of times Andreessen and Horowitz make references to various meetings pinch various politicians, it’s easy to get nan belief that they are mostly insulted that they are being treated for illustration mean constituents.

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

Andreessen says successful his newsletter-cum-manifesto, “The Little Tech Agenda,” that he is worried that AI will look akin scrutiny to crypto. The FTC has issued guidance to nan AI industry that indicated it will prosecute companies that exaggerate what their AI tin do, opportunity they are utilizing AI erstwhile they are not, and recklessly put products connected nan marketplace without decently analyzing nan risks. Meanwhile, the Consumer Financial Protection Bureau has told lenders that they must proviso a logic for a in installments denial that’s amended than conscionable “computer says no” erstwhile utilizing AI models. These regulations person small to do pinch exertion and a batch to do pinch old-fashioned lying.

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

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

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

The basal title present is that these 2 judge that nan Biden administration’s attack to AI “enshrine[s] nan 2 aliases 3 companies that they judge are nan only companies that matter arsenic benignant of imperishable monopolies,” Andreessen says. “And they’re going to conscionable fundamentally destruct nan 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 pinch a16z’s latest trading push. According to Andreessen’s newsletter, startups are threatened by nan government, which is “now far much dispute to caller startups than it utilized to be.” Besides his objections to nan measurement nan SEC has accrued its oversight of crypto, he is besides upset that a stepped-up liking successful antitrust has made it much difficult for him to exit investments. “Regulatory agencies are punitively blocking startups from being acquired by nan aforesaid large companies nan authorities is preferencing successful truthful galore different ways,” Andreessen writes. After all, nan Federal Trade Commission has launched an enquiry into Big Tech’s partnerships and investments pinch startups — with nan extremity of seeing if those partnerships squash competition. 

The irony is truthful evident it’s almost embarrassing to constituent it out. Andreessen says he is upset that Big Tech is excessively powerful, but he opposes antitrust action because that blocks a way for VCs to exit. Either you’re comfortable pinch Big Tech getting bigger, successful which lawsuit acquisitions are fine, aliases you want small tech to beryllium competitive, which intends blocking manufacture consolidation. Mainly, it seems that Andreessen believes successful cashing out.

In nan podcast, Andreessen and Horowitz pointedly sanction Google arsenic a threat to startups. “Google, I deliberation we would each agree, is much powerful than astir apt 95 percent of countries successful nan world,” Horowitz says astatine 1 point. Google, specifically, is simply a sore spot pinch nan correct wing. Vice statesmanlike nominee Vance has already said it should beryllium surgery 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 awesome galore right-wing podcasts without issue.

It’s unclear really earnestly to return Andreessen and Horowitz’s complaints astir Big Tech because nan complaints don’t rather quadrate pinch their behavior. For instance, Facebook is likewise powerful and influential, particularly successful AI. Andreessen sits connected its board. A16z is invested successful OpenAI, which has a business pinch Microsoft — and some person lobbied strenuously for much regularisation astir AI. It judge seems for illustration if a16z wants to alteration things astatine those large companies, personification could simply prime up nan phone.

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

Capital gains are paid connected finance assets, and they are typically paid erstwhile nan finance is sold and nan gains are, successful manufacture terms, “realized.” The new Biden treasury proposal intends that for group whose wealthiness is worthy much than $100 million, immoderate unrealized capital gains will beryllium taxed, too. This is what has Andreessen and Horowitz successful a tizzy. It intends that if they ain a clutch of highly weighted startup shares, they will person to salary taxes connected them earlier they rate 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 nan measurement nan worth of a startup is calculated for nan purposes of this projected taxation has to do pinch nan latest round’s valuation.

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

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

There is different rumor that mightiness origin wreckage passim Silicon Valley. It is immigration. An atrocious batch of immigrants comprise Silicon Valley’s talent excavation — a immense swath of engineers successful nan 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 group dedicated to migration betterment that Musk and Sacks some left. If location were an rumor that would rally nan group who attraction astir about progress, innovation, and talent, you’d deliberation protecting nan immigrants who’ve built lives and careers successful tech would beryllium it.

Stopping migration is simply a halfway rumor of nan Trump campaign. During nan Republican National Convention, delegates held up signs saying “Mass Deportation Now.” Trump has called nan H-1B, nan visa galore tech workers usage to travel to Silicon Valley, “very bad” and “unfair” to US workers. In his erstwhile term, he targeted H-1B visa applications specifically; successful nan fiscal twelvemonth 2018, almost 25 percent of applications were denied, up from astir 13 percent nan twelvemonth before. In fiscal twelvemonth 2019, 20 percent of H-1B applications were denied. The denials plummeted aft respective Trump management rules were thrown retired by courts; nan 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 rule is crypto law.” Buterin is 1 of nan astir influential voices successful crypto, and Ethereum is nan instauration for a swath of Andreessen Horowitz’s finance portfolio. Among nan investments that trust connected it are MakerDAO, VeeFriends, Dapper Labs, and EigenLayer. It is singular that nan laminitis of Ethereum is saying that voting for Trump is against nan crypto ethos, and nan large crypto investors are doing it anyway. 

The connection “immigration” is only mentioned by Andreessen and Horowitz successful nan podcast erstwhile they talk nan rally successful which personification attempted an assassination: Trump had turned his caput to look astatine a floor plan that purported to show forbidden migration into nan US arsenic nan slug whizzed by. I wondered why specified an important rumor for tech wasn’t addressed, truthful I emailed Margit Wennmachers, a16z’s PR guru, to ask. She didn’t reply.

After I vanished listening to nan podcast, a fewer things kept nagging astatine me. Take nan very opening of nan podcast. Once upon a time, Andreessen says, you could get very rich | and past springiness nan money distant successful philanthropy, “and you get tremendous in installments for that. And, you know, it absolves you of whatever.”

At immoderate constituent successful nan past 10 years, immoderate group suggested that possibly rich | group should salary much taxes alternatively of giving their money distant — that possibly nan whims of immoderate random rich | personification are not nan champion measurement to support nan astir susceptible successful our society. Andreessen and Horowitz propose that this critique of philanthropy is simply jealousy. It besides unbalanced “the deal.”

“The deal,” arsenic described connected nan podcast, is vague. To my ear, it sounds for illustration this: Tech companies could fundamentally do immoderate they wanted, arsenic agelong arsenic group who worked location paid precocious taxes and donated capable money to charitable causes. The money — taxes, donations — made them nan bully guys. 

Andreessen and Horowitz constituent to nan mid-2010s — that is, nan era of debased liking rates — arsenic nan clip of “the deal” unraveling. Notably, this is astir nan clip that nan tech hype rhythm became evident moreover to group 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 aliases little rejected by nan market, isolated from perchance AI. The 1 point 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 nan marketplace wants, Andreessen and Horowitz look to beryllium gambling connected authorities instead. Their timing is remarkable; not moreover a week aft their Trump endorsement, Biden dropped retired of nan race, rallying nan Democrats down Vice President Kamala Harris. In nan hours instantly pursuing nan 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 pinch nan Harris campaign.

But possibly that doesn’t matter. Near nan extremity of nan podcast, Horowitz says that he was shaken by nan assassination effort connected Donald Trump because he’s friends pinch Ivanka, his daughter, and Jared Kushner, his son-in-law. “Ivanka and nan 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 almost stiff because I had this emotion about, ‘Oh my god, Grandpa conscionable sewage shot.’”

So this VC cabal is trading against nan basal principles of America — not simply against individual freedom, but populist itself — in nan hopes of profit. It’s not nan first clip tech has made nan waste and acquisition against freedom; IBM made it during nan Holocaust.

In task capital, you are what you fund. Andreessen and Horowitz understand this, moreover embody it. But they aren’t conscionable backing nan issues they talk connected their podcast; they are backing Trump and Vance. That intends those donations are anti-abortion, anti-immigration, and perchance moreover anti-democracy because that is what nan Trump / Vance summons stands for. These are not subsidiary issues: these are now what 2 of Silicon Valley’s astir salient figures now guidelines for, too. Is that a bully investment?