Andreessen Horowitz founders explain why they support Trump, claim tech’s future is on the ballot

The founders of venture capital firm Andreesen Horowitz warn that what they call the arbitrary hammer of a Biden administration could crush startups or “small tech” and turn the United States into as fast as Germany A declining great power, or worse, – like Argentina.

“The future of our businesses, the future of new technology, the future of America is literally at stake,” Ben Horowitz said in a 90-minute podcast. “Even their families are at stake.” “For Little Tech, we think Donald Trump is actually the right choice – I’m sorry Mom, I know you’re going to be mad at me for this, but we have to do it.”

Partner Marc Andreessen, whose Netscape Navigator internet browser helped fuel the dot-com boom decades ago, believes rising anti-capitalist forces in the Democratic Party could play a role in ensuring American dominance. status of new businesses and the venture capital ecosystem.

A growing number of wealthy tech entrepreneurs, including Peter Thiel, David Sacks and Chamath Palihapitiya, are also willing to ignore Trump’s efforts to overturn the 2020 vote to support his return to the White House. (The podcast released Tuesday did not target Trump’s running mate, tech investor-turned-Senator J.D. Vance, whose anti-Big Tech credentials have cheered some in the startup world.)

Ben Horowitz
Bill Ackerman
Cameron Winklevoss
Doug Leone
Musk
Egan McCabe
Ken Howery
Kelsamani
Marc Anderson
Jacob Helberg
Joe Lonsdale
Palmer Lackey
Peter Thiel
Sean Maguire
Trevor Trainor
Tushar Jain
Tyler Winklevoss

Come on in, the water is warm. pic.twitter.com/tf09tsM6fg

— David Sacks (@DavidSacks) July 17, 2024

Three Core Arguments: Taxation, Artificial Intelligence, and Cryptocurrency

Andreessen and Horowitz provide three major examples where they claim a Biden administration will completely stifle innovation and stifle the economic growth needed for U.S. military strength: taxes, artificial intelligence, and blockchain.

Chief among them is the Biden Treasury Department’s proposal to impose a 25% annual tax on unrealized capital gains starting next year.

“That was the last straw for me, the most devastating thing,” Anderson said.

While the policy is billed as a tax on billionaires, Anderson warned that the $100 million threshold would also impact startup founders through rising valuations during funding rounds. Since the founder’s assets (i.e., their company) are inherently illiquid but taxes must be paid in cash, entrepreneurs will be forced to repeatedly sell off portions of their equity to satisfy the IRS.

“It’s completely mind-boggling to startups because why on earth would anyone do this instead of going to work at Google and get a lot of cash,” he said. Additionally, history shows that the $100 million threshold will gradually decrease and the 25% reduction will gradually increase over time.

“Second, the venture capital investment was just over—it was over. Companies like ours didn’t exist,” Anderson added. Some argue that this, in turn, will destroy Silicon Valley, creating a devil’s circle that erodes much of the tax base needed for social services for low-income families.

“Soon, we are Argentina,” Horowitz said.

Artificial intelligence regulation could ban entire fields of advanced mathematics

When it comes to artificial intelligence, the pair are alarmed by a recent executive order that would regulate who can operate supercomputers with speeds only found at big tech companies like Microsoft and Google, which would, in effect, control Power was given to a few oligarchs.

“They’re going to basically build an artificial intelligence OPEC right now,” Anderson warned. “Is this ignorance or malice? Are they not understanding what they’re doing, or are they doing this on purpose to create a cartel?

Things get worse. They tell the Biden administration that regulating artificial intelligence through technology rather than apps will ultimately mean they may need to ban certain types of advanced mathematics itself. They said the White House’s response was both strange and chilling.

“This is verbatim: ‘We classified entire areas of nuclear age physics and classified them as state secrets, and then the research disappeared. We absolutely have the ability to do it again for artificial intelligence— We will classify any area of ​​mathematics that we think is going in a bad direction, and that will be the end of it,” Anderson said. “I personally cannot tolerate the idea that we can declare linear algebra a state secret.”

Trump’s legislative agenda has pledged to repeal the executive order because, in Anderson’s words, the former president realizes that the United States must win the artificial intelligence race with China and cannot deliberately restrict its technology industry through such onerous regulations. Anything else and they risk falling behind.

“We’ve seen this in Europe, where they’ve basically eliminated almost all innovation through the concept of the precautionary principle, trying to prevent the future before it happens. That’s probably the thing I’m most concerned about,” Horowitz said.

Unprecedented attacks on blockchain and cryptocurrencies

Finally, they praised Trump for taking a diametrically opposed view on the crypto industry. The pair, who have been heavy investors in blockchain technology, believe Biden’s SEC is “going beyond the law by using the administrative state to essentially try to destroy an industry” by taking ad hoc enforcement measures on a case-by-case basis.

For example, even as Senate Democrats including Majority Leader Schumer approved legislation aimed at promoting banks’ custody of customers’ cryptocurrencies, Biden vetoed the bill.

Then Silicon Valley banks collapsed within hours of the largest run on deposits in history, briefly destabilizing the entire global financial industry and helping as far away as Zurich, Switzerland. The Bank of Credit Bank failed.

“This is a brutal attack on a nascent industry, something I’ve never experienced before, and I’m absolutely shocked that it’s happening,” Anderson said. “There can be no progress on this with the White House. This is A completely intolerable situation.

However, neither mentioned the failures of Silicon Valley and crypto-backed venture capital firms such as Andreessen Horowitz, which will lead to heightened scrutiny in late 2022 and early 2023. First there was the bursting of the altcoin bubble, which culminated with the criminal fraud exposed following the collapse of Sam Bankman-Fried’s FTX exchange.

While Anderson and Horowitz lament the Democratic Party’s departure from the pro-business era under Clinton and Obama, they do not address the problems those administrations created or failed to solve, such as the over-financialization of the economy and middle-class jobs Outsourcing.

Trump, aware of the growing income gap caused by the decline of blue-collar manufacturing in the United States, won in 2016 largely by promising punitive tariffs that turned blue states in America’s industrial heartland red. Bidenomics seeks to win them over by emphasizing Main Street over Wall Street and delivering truly higher wages with the help of reinvigorated unions.

Still, they argue, without a thriving venture capital environment that forces big tech companies to compete and innovate, productivity growth will decline, undermining the country’s ability to sustain the defense spending needed to defend itself against foreign enemies.

“The survival of America’s technological advantage depends on the success and fertile ground for new startups,” Anderson said.