Meet David Sacks, Trump’s AI and Crypto Czar

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[00:00:20] Welcome to Tech News Briefing. It's Monday, December 16th. I'm Belle Lin for The Wall Street Journal.

[00:00:27] One of Google's science projects is paying off in a big way, albeit way early.

[00:00:35] We'll find out why its parent company, Alphabet, saw its stock jump nearly 12% last week on the back of a new in-house chip that's designed to power quantum computing.

[00:00:47] And then who is David Sacks, President-elect Donald Trump's new pick for White House artificial intelligence and crypto czar?

[00:00:56] Our reporter, Rolf Winkler, tells us who the tech investor is and how he could influence tech policy in the White House.

[00:01:08] But first, quantum computing is still a long way off from any commercial use.

[00:01:15] But that didn't stop Google from making a major announcement in the form of a new in-house quantum chip called Willow last week.

[00:01:24] For more on Google's big bet in quantum computing, we're joined by Dan Gallagher, a columnist for WSJ's Heard on the Street column.

[00:01:33] Dan, what exactly is Google's new in-house chip Willow used for?

[00:01:39] It's a chip that's designed to essentially do quantum computing, which is this complicated concept of using quantum mechanics to build like a type of supercomputer that's far beyond the computational capabilities of anything we have today.

[00:01:56] Just as a case in point, in one of their test modules, they're able to perform like a series of calculations in a matter of minutes that would have taken something like millions of years using today's standard computing.

[00:02:11] And what are some of the other things that Willow or other quantum computers could be used for?

[00:02:17] Theoretically, quantum computing has potential applications in being able to design things like drugs and medicines down to the molecular level.

[00:02:25] You could like theoretically perform hyper accurate weather forecasts much further out because you need that kind of computing power to take in all the data about weather patterns and atmosphere and so forth.

[00:02:37] One darker aspect is quantum computing can probably break current encryption algorithms.

[00:02:43] So it'll have if we ever get to the day where quantum computing is kind of out there commercially, there's going to be a lot of interesting debates and applications and probably scary stuff, too.

[00:02:56] Oh, I can definitely imagine that.

[00:02:58] So it's kind of a good thing that quantum computing isn't quite commercially available yet, right?

[00:03:03] Yeah, it's still a long ways off.

[00:03:05] Think of it this way.

[00:03:06] Google made their last big announcement related to quantum computing in 2019.

[00:03:10] So it's been five years since they had a breakthrough there, and then this was another kind of technical breakthrough.

[00:03:16] It's still very much something that's in early concept.

[00:03:19] We're years away from seeing anything remotely commercial about it.

[00:03:23] Dan, Alphabet's stock jumped nearly 12% after Google announced its new chip last week.

[00:03:29] But what reason do we have to be a little skeptical about Google's bet on quantum computing?

[00:03:35] I don't think it's a reason so much to be skeptical on the bet.

[00:03:38] It's a big bounce.

[00:03:39] It's about $250 billion in market cap for them on something that's years away from any sort of commercial application.

[00:03:47] An important bit of context is that Google stock has been in the dumps for a while because of concerns about the problems the company's having with the Department of Justice and worries about generative AI and other things.

[00:03:58] So it was kind of low already and maybe primed for any sort of good news.

[00:04:02] But it was kind of a pretty big jump considering that this is not something that's going to be even close to being near or midterm for the business.

[00:04:11] That was Dan Gallagher, a columnist for WSJ's Heard on the Street.

[00:04:16] Coming up, David Sachs has had a reputation for reveling in controversy since the 1990s when he was still an undergraduate at Stanford University.

[00:04:28] What else we learned about the tech investor turned White House AI and crypto czar?

[00:04:34] After the break.

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[00:05:15] Though he comes with a reputation as a combative contrarian, the tech investor David Sachs is now closer to the center of political power as the newly appointed White House AI and crypto czar.

[00:05:30] With his over 1 million ex-follower in tow, Sachs has been one of the loudest Silicon Valley voices supporting Republicans, and he's put his money behind President-elect Donald Trump.

[00:05:43] Now, with even closer proximity to Trump, Sachs could shape policies key to both Silicon Valley and his own interests.

[00:05:52] Our reporter Rolf Winkler joins us now with more.

[00:05:55] And before we get into it, we should note that David Sachs did not respond to requests for an interview.

[00:06:02] So, Rolf, you write in your story that Sachs grew up in South Africa and moved to Tennessee as a child.

[00:06:10] What are some of the other highlights of his childhood and earlier life?

[00:06:14] He came here pretty young, probably around five years old.

[00:06:17] He was born in South Africa.

[00:06:19] Really, our reporting starts from his time at Stanford University, where he entered around the early 90s.

[00:06:26] And he very quickly connected with the Stanford Review, the conservative libertarian newspaper that was founded by Peter Thiel.

[00:06:35] And that's a place where he really, you know, started honing the persona of a conservative provocateur that we've seen ever since.

[00:06:45] And what would you say his reputation is like in Silicon Valley?

[00:06:49] You know, he's Republican in a place where it's often been taboo to be Republican.

[00:06:54] Some of that has changed, in part because of him.

[00:06:57] This year, certainly when Elon Musk jumped on the Trump bandwagon, and then Andreessen Horowitz, and David Sachs wasn't on the Trump bandwagon right away.

[00:07:10] But he was supporting DeSantis.

[00:07:12] He's also given money to RFK.

[00:07:14] But really, he and some others made it less taboo to speak publicly about being conservative in Silicon Valley.

[00:07:23] The other thing that makes him really influential is he's very wealthy.

[00:07:26] He's achieved success in a number of different areas.

[00:07:30] He co-wrote a book with Peter Thiel when he was in law school.

[00:07:34] And then they were among the founding team of one of the two companies that became PayPal.

[00:07:40] As you'll recall, PayPal was two companies.

[00:07:41] One started by Peter Thiel, another started by Elon Musk that merged.

[00:07:45] But David Sachs, who knew Thiel, was part of the PayPal team.

[00:07:49] And that was really his first big monetary success.

[00:07:52] And he had many others since.

[00:07:53] Let's talk a little bit about what David Sachs' peers have said about him.

[00:07:58] How have they described and what did they tell you about his, say, style of debate or maybe his investment strategy?

[00:08:04] He's an introverted guy.

[00:08:07] And somebody who's not the open plan Silicon Valley type David would prefer to sit and think in his office is how he's been described to us.

[00:08:17] At Zenefits, when he worked there, he would escape to an apartment across the street to work, use the bathroom, etc.

[00:08:23] So that's his kind of his personal style is a bit introverted, which contrasts with his public profile, which is very combative.

[00:08:31] He is not shy about taking it to the people he disagrees with.

[00:08:36] He's not shy about going on the offensive.

[00:08:38] And what has he gone on the offensive about, especially when it comes to regulation in areas that he's directly involved in, like crypto and technology?

[00:08:47] Well, one big thing is the Ukraine war.

[00:08:50] He is very opposed to the U.S. involvement in supporting the Ukrainians.

[00:08:56] He thinks it's a lost cause.

[00:08:57] And he's had some winning crypto investments.

[00:09:00] He's also invested in artificial intelligence.

[00:09:03] They want a friendlier regulatory environment than they feel they were going to get under Biden and then a Harris administration.

[00:09:09] They think they can get a friendlier environment, certainly for crypto, under a Trump administration.

[00:09:14] Right. But Rolf, at the same time, it seems like David Sachs' fund overlaps with his new government position.

[00:09:23] How might it create a conflict of interest?

[00:09:26] My colleague, Angel Aoyoung, she spoke to a former Bush administration official who talked about a law that basically says you need to divest yourself of investments

[00:09:38] where there's a clear overlap between the area you're regulating and the area you're investing, or you need the president to give you a waiver.

[00:09:44] That's not an easy process.

[00:09:47] And, you know, this isn't like an official cabinet position.

[00:09:49] And it's a good question, like, what do White House czars really do?

[00:09:53] That's an open question, too.

[00:09:55] It's a part-time job.

[00:09:56] Is he going to influence policy?

[00:09:57] Is he going to—it's not clear he's going to have anybody reporting to him.

[00:10:00] Even so, we were told that, look, you still need this waiver or you need to divest yourself.

[00:10:06] It seems unlikely that he's going to divest himself of all the various AI and crypto investments he has.

[00:10:13] So we'll see how that plays out.

[00:10:15] What do we know so far in terms of what Sachs' appointment might mean for regulation in crypto and AI and in technology broadly?

[00:10:25] You know, we don't know a lot.

[00:10:27] Gary Gensler, who was running the SEC under the Biden administration, was somebody who was not well-loved by the crypto community, to say the least.

[00:10:35] And everybody in the crypto world is very excited to see somebody that's going to take a different approach.

[00:10:41] Now, of course, the AI and crypto czar is not the head of the SEC.

[00:10:44] These are different jobs.

[00:10:45] But it's indicative of the approach Trump is going to take to put people like Sachs in a position to influence policy.

[00:10:55] It's certainly going to be less combative than it was with Gensler and the people in the crypto community.

[00:11:00] They favor that.

[00:11:02] That was our reporter, Rolf Winkler.

[00:11:04] And that's it for Tech News Briefing.

[00:11:07] Today's show was produced by Julie Chang with supervising producer Catherine Millsop.

[00:11:13] Logging off, I'm Belle Lin for The Wall Street Journal.

[00:11:16] We'll sign back in this afternoon with TMB Tech Minute.

[00:11:20] Thanks for listening.

[00:11:27] Amazon Q Business is the new generative AI assistant from AWS.

[00:11:31] Because many tasks can make business slow, as if wading through mud.

[00:11:36] Uh, help?

[00:11:37] Luckily, there's a faster, easier, less messy choice.

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[00:11:46] Now you can summarize quarterly results or do complex analysis in no time.

[00:11:50] Q got this.

[00:11:51] Learn what Amazon Q Business can do for you at aws.com slash learn more.