Trump AI Advisor David Sacks defends tech investments : NPR

David Sachs, President Trump's influential adviser on artificial intelligence and cryptocurrencies, is on the defensive over government documents that critics say give him “carte blanche” to shape US policy while keeping hundreds of investments in the tech world.

Sachs is a prominent venture capitalist who, along with Elon Musk and Peter Thiel, is a member of the Paypal Mafia, a group of online payments company executives who helped ignite the digital economy after the dot-com crash.

The debate over Sachs' investments began just as he was helping to form controversial decree direct the Justice Department to challenge government artificial intelligence laws deemed “burdensome” on the industry—something that has met both bipartisan opposition and from members of the MAGA movement who distrust the tech elite.

Ethics expert questions scope of waivers

The controversy centers on routine government documents known as ethics waivers that special government employees like Sachs often receive.

The documents are intended to make a public interest case that prompted the White House to hire the former industry insider and disclose investments related to the sector for which the official will be developing policy.

Sachs did sell some tech holdings such as Amazon, Meta and xAI to Musk, but official documents show that he and his firm Craft Ventures are backing more than 400 investments in AI-related technology companies.

Kathleen Clark, a government ethics expert at Washington University in St. Louis, described the broad nature of the denial as highly unusual.

“These are bogus ethical waivers,” Clark said. “They lack the rigorous, objective ethical analysis that would ensure that public policies are implemented for the public benefit. Instead, they were intended to allow Sachs to profit from his position in government,” she said, characterizing the denials as “akin to a presidential pardon in advance.”

Clark said the waivers essentially say, “Go ahead and take actions that would normally violate the criminal conflict of interest law, we won't prosecute you for it.”

Silicon Valley is protecting one of its own

After New York Times recently published investigation into Sachs's AI and crypto assets, dozens of his tech friends rushed to his defense on X, showering him with praise and insulting the newspaper.

“While the Americans are quarreling, our rivals are studying David’s every move. “I’ve known David for decades and I’ve never seen him more poignant and necessary,” billionaire Salesforce CEO Marc Benioff. wrote on X about Sachs, who is also a billionaire.

How Time looked closely at Sachs, he said that hired the defamation law firm sent threatening letters to the newspaper, which Sachs alleged “deliberately distorted or ignored the facts to support their false story.”

In his statement A. Time representative said he remains confident in his reporting on Sachs, which revealed “the ethical complexities and intertwined interests of his dual role as government adviser and major investor.”

Sachs declined to talk to NPR but addressed the controversy on his podcast: all-inwhich he continues to co-host even while working in the White House.

“The truth is that I have invested hundreds of millions of dollars in positions in promising technology businesses, at great cost to my net worth,” Sachs said. “So not only is this job not benefiting me, but it is actually costing me a lot of money.”

He stressed that the Office of Government Ethics approved his public denials and concluded that he had no conflict of interest in his venture capital firm's investments.

MAGA factions squabble over AI regulation

Questions about conflicts of interest have emerged just as Sachs scored a major victory with Trump's signing on Thursday of an executive order that aims to overturn some of the more than 100 laws states have decided to regulate AI. Most of them target AI deepfakes or require additional transparency and disclosure of how AI models work.

The idea was shelved the first few times Sachs advocated it, but the president signing an executive order putting government AI laws in the crosshairs was something Silicon Valley executives had wanted for months.

In particular, OpenAI, Google and venture capital firm Andreessen Horowitz have lobbied for months for the measure, arguing that a patchwork of government laws could hinder the artificial intelligence boom and give China an advantage.

“The 50-state patchwork is a startup killer,” said Marc Andreessen, an influential venture capitalist. by X last month. “Federal AI legislation is important. There is no greater challenge for Little Tech—the builders who are building America's future.”

On Friday, appearing on Bloomberg TechSachs said, “We need a single federal or national regulatory framework for AI.”

The rollback of government AI laws has sparked resistance not only from AI safety advocates, but also from within the MAGA world.

Steve Bannon, Trump's former chief strategist, has emerged as a key opponent of Sachs' policies, calling for artificial intelligence labs' efforts to create superintelligence to be paused until the risks are better understood.

“I think the problem with Sachs, in my opinion, is not that he has these conflicts. My big problem is his judgment,” Bannon told NPR shortly after he spent time lobbying for Sachs' policies at Trump's Mar-a-Lago.

Bannon said Sachs is focused solely on the growing dominance of the tech industry, with no concern for public safety.

“Right now you have more rules, ten times more rules, for opening a nail salon on Capitol Hill than you do for one of the most promising and at the same time one of the most dangerous technologies ever invented,” Bannon said. “My question to this group is: where is the risk reduction? I didn't see him.”

Fear of salvation if the AI ​​bubble bursts

Bannon also expressed deep concern that Sachs and his allies could push the federal government to bail out technology industry taxpayers if the current situation changes. AI investment bubble burst.

This concern is reinforced by Sachs's history: two years ago, he was one of the loudest voices advocating a government bailout. failed Silicon Valley bank. And the federal government stepped in to shore up $175 billion in deposits.

“When you start talking about their capital, and if the taxpayer comes forward and guarantees it, and it's sort of divided up and given away, we'll see what kind of public servant these guys are,” Bannon said.

Sachs, in his posts on X, gave mixed messages about the specter of federal aid for the tech industry. Last month, he wrote that if one of the largest cutting-edge artificial intelligence labs, such as OpenAI and Anthropic, fails, others will take its place.

“There will be no federal aid for artificial intelligence,” Sachs wrote.

But in another mail A few weeks later, speaking about the growing pace of investment in artificial intelligence that has analysts wary of a bubble, Sachs wrote: “The reversal could lead to a recession,” he said. “We can't afford to go backwards.”

Clarke, the ethics expert, said she thinks this shows that “if the bubble bursts, there will be a lot of heartache, and people who invested in these bubbles will be asking for bailouts.”