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In a surprising move, President-elect Donald Trump has appointed David Sacks to oversee policymaking on artificial intelligence and cryptocurrency.
Sacks has no experience or significant investing connections to the new industries but has built a profession that encompasses more than artificial intelligence (AI) and cryptocurrency.
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Sacks is part of the renowned "PayPal Mafia" — a group of PayPal alumni who went on to found a number of successful tech companies and played a key role in shaping the evolution of the Internet following the collapse of the Dot-com bubble in 2001. Outside of his tech ventures, Sacks ventured into Hollywood as a producer for the 2005 film Thank You for Smoking, where he brought on his PayPal buddies Elon Musk and Peter Thiel as executive producers.
Through his venture firm, Craft, he has made substantial investments, including in Musk's companies like SpaceX, and he is also known for co-hosting the All-In podcast.
He has also made a tidy sum from cryptocurrency. In 2018, Samani's Multicoin Capital – which had previously invested in the Solana – received funding from Craft Ventures. Launched in 2020 with a value of less than $1, the token reached a high of almost $250 by the end of 2021, and currently sits around $220.
Investors, however, place a higher value on his tech-friendly mindset and long history of scepticism about government regulation, which is much more essential for these sectors.
Crypto Czar
Sacks most recently criticized Gary Gensler and the Securities and Exchange Commission's (SEC) harsh stances regarding cryptocurrency in an edition of his podcast aired in November following Trump's election.
In an announcement on his Truth Social, Trump referred to Sacks as the "White House A.I. & Crypto Czar."
Silicon Valley was caught off guard by the appointment of Sacks, a prominent Trump fundraiser. The venture capitalist isn't considered a major player in the crypto business.
Even though he's backed Musk's xAI, an AI business that has raised over $10 billion this year, he has yet to make many AI investments himself.
On the other hand, Sacks has long argued that the government meddles too much in the tech business.
Craft Ventures' 52-year-old founder, who is also a member of the so-called PayPal Mafia, has long been a prominent voice in the industry's debates against government regulations.
Executives in the fields of artificial intelligence and cryptocurrency perceive government interference as a possible existential danger, so the startup sector considers this choice a blessing.
Many entrepreneurs have fled to other countries due to US actions against crypto enterprises.
The pioneers of artificial intelligence are concerned that overly stringent safety rules could stunt the industry's rapid growth.
Crypto advocates were ecstatic by the decision, which Trump claimed would provide entrepreneurs with more regulatory certainty and remove any ambiguity.
Trump has shown that he will be amenable to AI and cryptocurrencies.
Since he took office, Bitcoin's value has skyrocketed, and he has promised to reverse President Joe Biden's AI executive order from 2023, which mandates that developers conduct safety tests on new models. Being a close friend of Sacks and a crucial ally of Trump, Musk is also interested in AI.
Even OpenAI CEO Sam Altman was in a congratulatory mood in his post on X.
congrats to czar @DavidSacks!
— Sam Altman (@sama) December 6, 2024
On Monday, included among OpenAI's "shipmas" announcements preceding the holidays, a turbocharged ChatGPT membership was introduced, with a price tag that users would find more difficult to swallow than dry turkey.
The startup's most cutting-edge artificial intelligence techniques are available to ChatGPT Pro subscribers for $200 per month.
Those who use ChatGPT extensively in domains such as mathematics, physics, and coding may be surprised by the price, which is 10 times higher than ChatGPT Plus.
At the moment, AI companies are attempting to gauge the price point at which they can attract clients, especially in the business sector, and the Pro bundle arrives at just the right time.
One example is Microsoft's latest addition to its business productivity suite: an AI-enhanced edition. Copilot AI is available for an additional $30/month for Excel and Outlook.
Meanwhile, the monthly price for its Github coding help Copilot is $10 to $40.
One interpretation of OpenAI's decision to raise rates is that it needs to reflect the rising cost of computation.
Another interpretation is that users have grown reliant on ChatGPT.
The primary selling point of the Pro membership is the ability to ask an infinite number of questions using its "o1" reasoning model, which can simulate human debate on complex subjects. This model is also more computationally intensive.
Risks For OpenAI on the Rise?
However, Sacks' loyalties have caused some concern in the AI community. Investors in Musk's xAI include Sacks' Craft Ventures, and speculation on Sacks' treatment of competitors in the cut-throat business has come in because of his connections to Musk.
An important xAI rival, OpenAI, has been the target of Sacks's criticism in the past.
According to Sacks and Trump's supporters, getting your hands dirty with the sector is the only way to understand it truly, and there will inevitably be accusations of bias.
Sacks has invested money in BitGo and Bitwise, two cryptocurrency startups, as well as co-founded AI firm Glue. He has also invested in Replit, an AI authoring tool, and CopyAI, a developer startup.
The new czar position will be advisory rather than a full-time government job, and Sacks will be staying at Craft. He is not obligated to sell his assets or declare them publicly as a condition of his nomination.
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Sacks will also be a special government employee, similar to Musk. The annual maximum for his service, with or without pay, is 130 days.
Nevertheless, according to the special government personnel regulations, Sacks would be obligated to refrain from participating in any proceedings that could affect his assets.
Besides, many in the business community think it would have been better if the roles of crypto czar and AI czar had been kept distinct. This would have shown that the two technologies were distinct, with their own set of advantages and disadvantages.
Elsewhere
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Blockcast
In this episode, Takatoshi Shibayama sits down with Jason Choi, general partner at crypto prop shop Tangent, for a candid exploration of crypto markets. Choi discusses meme coin supercycles, navigating macroeconomic headwinds, and the evolution of project evaluation from speculative hype to real-world traction.
Previous episodes of Blockcast can be found on Podpage, with guests like Peter Hui (Moongate), Luca Prosperi (M^0), Charles Hoskinson (Cardano), Aneirin Flynn (Failsafe), and Yat Siu (Animoca Brands) on our most recent shows.
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