Billionaires at the trough...
Behind the Curtain: The Silicon swamp
- Mike Allen,
- Jim VandeHei
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Illustration: Aïda Amer/Axios
The
incoming Trump administration will give Silicon Valley moguls unprecedented federal power, with tech-friendly officials and policies intertwined throughout government.
Why it matters: The tech economy's most aggressive disrupters want to apply their ethos and thinking to government. AI, crypto and move-fast, break-things thinking will be at the center of the
new Washington agenda — with America's technological lead over China in the balance, and vast fortunes at stake.
A stunning alignment of people, power and momentum are all suddenly enlarging tech's tentacles:
- President-elect Trump tapped David Sacks — a member of the "PayPal Mafia" of early executives, who became famous as part of the "All-In" podcast ensemble — for the new position of White House AI & crypto czar, with a mandate of "making America the clear global leader in both areas."
- Elon Musk — who has been living at Mar-a-Lago and accompanied Trump to Paris for his return to the world stage — will be the second most powerful man in the world. He was this election cycle's biggest donor (and the biggest in at least the last four presidential cycles) — and is now co-architect with Trump of the new government, pushing relentlessly for "radical change" in government spending, mission and personnel.
- Trump's NASA will be headed by Jared Isaacman, a tech billionaire who partnered withMusk's SpaceX to lead the first private spacewalk last September.
Musk will be joined by Vivek Ramaswamy, who became a
billionaire as a
biotech entrepreneur, in launching the Department of Government Efficiency (
DOGE) — an advisory body named for a cryptocurrency,
Dogecoin.
- Marc Andreessen, one of the original internet moguls, and other tech leaders have literally been in the Trump transition offices in West Palm Beach, interviewing potential top appointees for the Pentagon, State Department and HHS, The New York Times reports.
- Peter Thiel — the conservative venture capitalist and PayPal Mafia co-founder who was a mentor to Vice President-elect JD Vance — has allies in top Trump positions, including Jim O'Neill, former CEO of the Thiel Foundation, who has been named to be deputy HHS secretary.
- Vance is a former venture capitalist who began his career working for Thiel.
- Even Jeff Bezos, Musk's rival in the race to Mars, is sounding Trumpy. Bezos said at last week's New York Times DealBook conference that he's "actually very optimistic" about Trump's plans: "He seems to have a lot of energy around reducing regulation. ... If I can help him do that, I'm gonna help him."
What they're saying: Joe Lonsdale — a venture capitalist and Palantir co-founder who advised the Trump transition on job candidates — told us: "This is a very optimistic administration, bringing in the talent that is willing to confront the waste, and figure out solutions — people who believe that despite the typical cynicism and nihilism of so many in D.C. that they can change things and that it matters."
- "[M]any of my friends — some who have exited companies after working hard for years and want to give back more — plan to serve and work hard for free to support the efforts," Lonsdale added.
- "I think a lot of people haven't properly understood that there's a huge difference between 'big tech' and 'the most competent builders in the innovation world.' The legacy [media] line is this is tech or Silicon Valley coming in. But most of these guys don't get along with [the] big tech crowd — these are many of our top builders."
Between the lines: Huge federal contracts will stem from Trump's disruption of government, many of which could benefit Musk and his buddies.
- Defense acquisition is one of the arms of government that tech startups are eying most eagerly. Ramaswamy told Mike during an onstage interview at the Aspen Security Forum last week that he wants the Pentagon to move money away from legacy programs, and into disruptive technologies — investing more in drones and hypersonic missiles, "rather than in a wide range of other expenditures for new kinds of fighter jets or whatever that aren't the highest ... use of the dollar to even protect the best interests of the United States or to protect the United States itself."
- HHS and the Department of Veterans Affairs are potential gold mines for contracts to modernize patient records.
Context: Silicon Valley also had tons of influence in the Obama administration, particularly early. But it was a very different crowd, including legendary venture capitalist
John Doerr.
- Now, a small but loud group of tech stars is coming to D.C. — with a libertarian ethos that doesn't always reflect the Valley as a whole.
What we're hearing: Trump
has promised a "golden age of America." So anything that stokes market metrics will appeal to him — including cryptocurrencies. Oil and gas, financial services, private prisons and crypto are all part of the booming "Trump trade" by investors bullish on the new administration.
- Trump took credit when the price of a single Bitcoin surged to a record high last week, with a Truth Social post saying: "CONGRATULATIONS BITCOINERS!!! $100,000!!! YOU'RE WELCOME!!!"
We're told to expect him to promote crypto-friendly regulations — starting with his choice of a
crypto advocate and
industry adviser, Paul Atkins,
to chair the Securities and Exchange Commission, which oversees U.S. markets.
- Part of Trump's charge to Sacks as emerging tech czar is to work on a "legal framework so the Crypto industry has the clarity it has been asking for."
The backstory: Crypto companies contributed one-third of all direct corporate contributions to super PACs in this election,
"60 Minutes" found. In House races, industry donors had an 85% win rate among the 29 Republicans and 33 Democrats they backed.
- Fifty days before the election, Trump launched a family cryptocurrency venture, World Liberty Financial.
What to watch: Trump "is going to be very focused on the price of Bitcoin," a top transition source told us.
- "It's another stock market for him," the source explained, adding that Trump would love for Bitcoin to hit $150,000 early in his presidency.
The bottom line: Andreessen — co-founder of the iconic venture capital firm Andreessen Horowitz —
tweeted Sunday that "political power >> financial power every day of the week."