The moral bankruptcy of Marc Andreessen and Ben Horowitz

Last week, the founders of venture capital firm Andreessen Horowitz declared their allegiance to Donald Trump in their customary fashion: talking about money on a podcast.

“Sorry, Mom,” Ben Horowitz says in an episode of The Ben & Marc Show. “I know you’re going to be mad at me for this. But, like, we have to do it.”

Marc Andreessen and Horowitz insist they voted for Democrats until now. They are friends with liberals. They claim to be nervous about the social blowback they will receive for this, especially because of the historically progressive nature of the tech industry and the Bay Area.

But given the general movement among their class toward Trump, I think those claims about being nervous are overblown, if not performative. There is, for instance, Elon Musk’s pro-Trump super PAC, which has support from Sequoia Capital’s Shaun Maguire and 8VC’s Joe Lonsdale, among other notables. (The Wall Street Journal reported Musk is planning to donate $45 million a month, which Musk has denied.) There’s the $160 million the crypto movement has put forward in support of crypto-friendly candidates. We can’t forget their VC pal David Sacks speaking at the Republican National Convention. And last but not least, there’s Trump’s running mate choice of JD Vance, a former venture capitalist whose firm’s investors included Peter Thiel, Eric Schmidt, and Andreessen himself.

This isn’t a movement. It’s a clique.

The podcast itself is an extraordinary performance. At one point, Andreessen concedes that their major problems with President Joe Biden — the ones that led them to support Trump — are what most voters would consider “subsidiary” issues. “It doesn’t have anything to do with the big issues that people care about,” he says. If we take this podcast at face value, we are to believe that these subsidiary issues are the only reason they’ve chosen to endorse and donate to Trump.

These subsidiary issues take precedence for Andreessen and Horowitz over, say, mass deportations and Project 2025’s attempt to end no-fault divorce. We are looking at a simple trade against personal liberty — abortion, the rights of gay and trans people, and possibly democracy itself — in favor of crypto, AI, and a tax policy they like better. 

For Horowitz, “probably the most emotional topic” is crypto — a16z started a $4.5 billion crypto fund in 2022, and the pair believe that the Biden administration has been deeply unfair to crypto. In Horowitz’s view, the Biden administration “basically subverted the rule of law to attack the crypto industry.” 

Certainly much of the crypto industry prefers Trump. But it seems obvious that there has been a lot of intra-agency squabbling as Congress dithered on passing any laws. To place the blame squarely on Biden is bizarre, particularly when we have Trump’s chaotic previous term as guidance. Sure, Trump is no longer saying Bitcoin is “a scam against the dollar,” as he did in 2021; he is scheduled to speak at the Bitcoin conference this year. But his record in office is not exactly pro-crypto. During the Trump administration, financial regulator FinCEN initially asked the public to provide comments on a crypto rule change over a 15-day period that included Christmas Eve, Christmas Day, New Year’s Eve, and New Year’s Day, which effectively shortened the comment window by four working days. There is also the Ripple Labs enforcement case, in which the SEC is seeking a $1.95 billion fine; it, too, dates to the Trump administration. 

The pair’s complaints about Gary Gensler, the current head of the Securities and Exchange Commission, are striking. They are particularly annoyed that he won’t pay attention to them. “We’re the largest crypto investors or largest blockchain investors in the world, and we’ve requested meetings with him at least a half a dozen times,” Horowitz says. Gensler has not met with them. Neither, they say, has Senator Elizabeth Warren or Biden himself.

In fact, Andreessen makes it clear that he expects presidential attention, something he’s been getting since he was 23. Given the number of times Andreessen and Horowitz make references to various meetings with various politicians, it’s easy to get the impression that they are mostly insulted that they are being treated like ordinary constituents.

From crypto, we move to AI, which Andreessen and Horowitz don’t think is being regulated correctly either. According to Horowitz, AI is as powerful as, or more powerful than, the internet and the global computer industry from the 1950s on. “This may be the biggest technological boom of all time,” Andreessen says. 

Andreessen says in his newsletter-cum-manifesto, “The Little Tech Agenda,” that he is worried that AI will face similar scrutiny to crypto. The FTC has issued guidance to the AI industry that indicated it will pursue companies that exaggerate what their AI can do, say they are using AI when they are not, and recklessly put products on the market without properly analyzing the risks. Meanwhile, the Consumer Financial Protection Bureau has told lenders that they must supply a reason for a credit denial that’s better than just “computer says no” when using AI models. These regulations have little to do with technology and a lot to do with old-fashioned lying.

In the podcast, Andreessen and Horowitz single out Biden’s executive order about artificial intelligence. The order requires companies to disclose the presence of very large models, as well as to provide the government information about what the plans are for the model, what cybersecurity measures are taken to protect those models, and the results of red-team testing for sensitive subjects, among other things. This is in keeping with Horowitz’s assertion about the seriousness of the technology. 

So what’s the problem? The two focus on computing power. The disclosure requirements apply to “any model that was trained using a quantity of computing power greater than 10²⁶ integer or floating-point operations, or using primarily biological sequence data and using a quantity of computing power greater than 10²³ integer or floating-point operations.” Andreessen and Horowitz think specifying such a limit is ridiculous. Little tech “will be snuffed out by this kind of regulation,” Horowitz says.

It is perhaps worth noting that nothing above the size specified in the executive order — the size Andreessen and Horowitz object to — even exists yet, according to Arati Prabhakar, Biden’s top tech advisor.

The fundamental complaint here is that these two believe that the Biden administration’s approach to AI “enshrine[s] the two or three companies that they believe are the only companies that matter as sort of permanent monopolies,” Andreessen says. “And they’re going to just basically destroy the startup ecosystem underneath that.” Andreessen Horowitz is, of course, invested in that ecosystem, having earmarked $2.25 billion for AI applications and infrastructure.

The anti-monopoly rhetoric is in keeping with a16z’s latest marketing push. According to Andreessen’s newsletter, startups are threatened by the government, which is “now far more hostile to new startups than it used to be.” Besides his objections to the way the SEC has increased its oversight of crypto, he is also upset that a stepped-up interest in antitrust has made it more difficult for him to exit investments. “Regulatory agencies are punitively blocking startups from being acquired by the same big companies the government is preferencing in so many other ways,” Andreessen writes. After all, the Federal Trade Commission has launched an inquiry into Big Tech’s partnerships and investments with startups — with the goal of seeing if those partnerships squash competition. 

The irony is so obvious it’s almost embarrassing to point it out. Andreessen says he is upset that Big Tech is too powerful, but he opposes antitrust action because that blocks a route for VCs to exit. Either you’re comfortable with Big Tech getting bigger, in which case acquisitions are fine, or you want little tech to be competitive, which means blocking industry consolidation. Mainly, it seems that Andreessen believes in cashing out.

In the podcast, Andreessen and Horowitz pointedly name Google as a threat to startups. “Google, I think we would all agree, is more powerful than probably 95 percent of countries in the world,” Horowitz says at one point. Google, specifically, is a sore spot with the right wing. Vice presidential nominee Vance has already said it should be broken up. Vance believes Google is controlling information and skewing too far left. Of course, Google’s moderation policies don’t just apply to Google News — they also affect YouTube, which hosts a great many right-wing podcasts without issue.

It’s unclear how seriously to take Andreessen and Horowitz’s complaints about Big Tech because the complaints don’t quite square with their behavior. For instance, Facebook is similarly powerful and influential, especially in AI. Andreessen sits on its board. A16z is invested in OpenAI, which has a partnership with Microsoft — and both have lobbied strenuously for more regulation around AI. It sure seems like if a16z wants to change things at those big companies, someone could simply pick up the phone.

At this point in the podcast, you could squint and say maybe the concern about AI and crypto is really about technology and progress. But from those two topics, we move on to classic rich guy shit of the most tedious kind: tax reform. Andreessen says it was “the final straw for me. This is the thing that tipped me hard.” They are upset about a proposal to alter capital gains taxes. 

Capital gains are paid on investment assets, and they are typically paid when the investment is sold and the gains are, in industry terms, “realized.” The new Biden treasury proposal means that for people whose wealth is worth more than $100 million, any unrealized capital gains will be taxed, too. This is what has Andreessen and Horowitz in a tizzy. It means that if they own a clutch of highly valued startup shares, they will have to pay taxes on them before they cash out. This is a “very scary proposal,” Horowitz says.

Startups are illiquid assets, Andreessen points out. “Startups never go up and down.  They’re never overvalued,” says Horowtiz, dryly. “There’s no bubbles.” Andreessen notes that the way the value of a startup is calculated for the purposes of this proposed tax has to do with the latest round’s valuation.

Historically, one of the ways that Andreessen Horowitz has approached startup investing is to inflate a company’s valuation; it is “the OG when it comes to doling out speculative startup valuations.” The new proposed tax punishes this kind of behavior — a high valuation means a high tax. “This makes startups completely implausible,” says Andreessen. “Venture capital just ends. Firms like ours don’t exist.”

This is followed by an anxiety spiral that is sort of difficult to convey in text; I suggest you listen for yourself. “California is done,” says Andreessen. “It’s total destruction.” The taxes won’t just target the wealthy; they’ll come for everyone. “Once the structure gets established, the politicians do what they do: they’ll walk the numbers up,” Andreessen says. “Presto chango, we’re Argentina!” says Horowitz.

Finally, Horowitz gets ahold of himself. “By the way, this one probably won’t get all the way through the system,” he says. “But it might!”

There is another issue that might cause wreckage throughout Silicon Valley. It is immigration. An awful lot of immigrants comprise Silicon Valley’s talent pool — a huge swath of engineers in the US are on H-1B visas. The Trump / Vance ticket is virulently anti-immigrant.

The current CEOs of Google, Microsoft, Adobe, and IBM are all immigrants. So are Peter Thiel and Elon Musk. Mark Zuckerberg and Bill Gates are involved in Fwd.us, a lobbying group dedicated to immigration reform that Musk and Sacks both left. If there were an issue that would rally the people who care most about progress, innovation, and talent, you’d think protecting the immigrants who’ve built lives and careers in tech would be it.

Stopping immigration is a core issue of the Trump campaign. During the Republican National Convention, delegates held up signs saying “Mass Deportation Now.” Trump has called the H-1B, the visa many tech workers use to come to Silicon Valley, “very bad” and “unfair” to US workers. In his previous term, he targeted H-1B visa applications specifically; in the fiscal year 2018, almost 25 percent of applications were denied, up from about 13 percent the year before. In fiscal year 2019, 20 percent of H-1B applications were denied. The denials plummeted after several Trump administration rules were thrown out by courts; the denial rate in 2022 was just 2 percent.

Immigration plainly matters for crypto — as Ethereum founder Vitalik Buterin says, “The crypto industry is uniquely international, and so immigration law is crypto law.” Buterin is one of the most influential voices in crypto, and Ethereum is the foundation for a swath of Andreessen Horowitz’s investment portfolio. Among the investments that rely on it are MakerDAO, VeeFriends, Dapper Labs, and EigenLayer. It is remarkable that the founder of Ethereum is saying that voting for Trump is against the crypto ethos, and the big crypto investors are doing it anyway. 

The word “immigration” is only mentioned by Andreessen and Horowitz in the podcast when they discuss the rally in which someone attempted an assassination: Trump had turned his head to look at a chart that purported to show illegal immigration into the US as the bullet whizzed by. I wondered why such an important issue for tech wasn’t addressed, so I emailed Margit Wennmachers, a16z’s PR guru, to ask. She didn’t reply.

After I finished listening to the podcast, a few things kept nagging at me. Take the very beginning of the podcast. Once upon a time, Andreessen says, you could get very rich and then give the money away in philanthropy, “and you get enormous credit for that. And, you know, it absolves you of whatever.”

At some point in the last 10 years, some people suggested that maybe rich people should pay more taxes instead of giving their money away — that perhaps the whims of some random rich person are not the best way to support the most vulnerable in our society. Andreessen and Horowitz suggest that this critique of philanthropy is simply jealousy. It also unbalanced “the deal.”

“The deal,” as described on the podcast, is vague. To my ear, it sounds like this: Tech companies could basically do whatever they wanted, as long as people who worked there paid high taxes and donated enough money to charitable causes. The money — taxes, donations — made them the good guys. 

Andreessen and Horowitz point to the mid-2010s — that is, the era of low interest rates — as the time of “the deal” unraveling. Notably, this is around the time that the tech hype cycle became obvious even to people who weren’t paying attention. This year, it’s scooters! Now it’s viral media companies! Now it’s metaverse! Now it’s crypto! Now it’s AI! 

These ideas were more or less rejected by the market, except possibly AI. The one thing all these hype cycles had in common was VCs talking their books, as publicly as possible. That charge was led by Andreessen Horowitz.

So now, instead of investing in things the market wants, Andreessen and Horowitz appear to be gambling on legislation instead. Their timing is remarkable; not even a week after their Trump endorsement, Biden dropped out of the race, rallying the Democrats behind Vice President Kamala Harris. In the hours immediately following the announcement, small-money donors raised $46.7 million for her campaign. By endorsing Trump, Andreessen and Horowitz have effectively lost whatever leverage they might have had with the Harris campaign.

But maybe that doesn’t matter. Near the end of the podcast, Horowitz says that he was shaken by the assassination attempt on Donald Trump because he’s friends with Ivanka, his daughter, and Jared Kushner, his son-in-law. “Ivanka and the kids were just at my house,” Horowitz says, of learning Trump was shot. “We went to see David Copperfield and all that. So my brain was almost frozen because I had this feeling about, ‘Oh my god, Grandpa just got shot.’”

As for Andreessen, he has been inveighing against “woke” capital, engaging in Twitter culture wars, and complaining about what he views as the media’s hostility to free speech for a while now. In Andreessen’s 2023 “Techno-Optimist Manifesto,” he lists what he terms “patron saints” of the movement. They include Filippo Tommaso Marinetti, an Italian futurist who was also the co-author of The Fascist Manifesto; Nick Land, whose writing is a foundational text for the so-called alt-right; Neven Sesardic, a philosopher who argues that race is biologically real and not socially constructed; and Vilfredo Pareto, who argued that democracy is an illusion. 

And this talk about democracy brings me to Curtis Yarvin, personal friend of vice presidential candidate Vance. Yarvin, a software developer, is openly anti-democracy. (Yarvin’s recent newsletter, in response to Biden dropping out, enthusiastically advocates for a return to monarchy. Freak shit.) One of Yarvin’s ideas, called “retire all government employees” or RAGE, is part of Project 2025, a Heritage Foundation proposal for what Trump should do if he wins. This rhetoric was echoed by Vance in 2021, who called out Yarvin by name. 

So this VC cabal is trading against the basic principles of America — not merely against personal freedom, but democracy itself — in the hopes of profit. It’s not the first time tech has made the trade against freedom; IBM made it during the Holocaust.

In venture capital, you are what you fund. Andreessen and Horowitz understand this, even embody it. But they aren’t just funding the issues they discuss on their podcast; they are funding Trump and Vance. That means those donations are anti-abortion, anti-immigration, and possibly even anti-democracy because that is what the Trump / Vance ticket stands for. These are not subsidiary issues: these are now what two of Silicon Valley’s most prominent figures now stand for, too. Is that a good investment?

Correction July 24: An earlier version of this article misstated the donation strategy of a crypto super PAC. The group also spends money on Democratic candidates, not just right-wing ones.