President Donald Trump has picked the world’s richest men to join his staff. We discuss how that could shape America’s future in defense, health, and AI in a podcast between reporters from Business Insider and Politico.
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00:00One question that I've had so many discussions with colleagues, past and present, about is,
00:05would you want to be a billionaire? And a surprising number of people say no.
00:08My answer is obviously yes, duh, give me a billion dollars.
00:11What's the con argument?
00:13The general ethical argument that billionaires should not exist.
00:18You know, more money, more problems.
00:19I'll fall on the sword. I will accept a billion dollars.
00:22That's very brave of you, Fiyah.
00:24I think I would rather have a billion dollars than be a billionaire.
00:28Being a billionaire carries a sort of,
00:32it's an identity and you are expected to comport yourself in certain ways.
00:36I don't think, from what I'm understanding at least,
00:39I would never want to be a billionaire who is in Washington.
00:43As Donald Trump heads into his second administration, he's surrounding himself
00:46by billionaires. The net worth of those who are set to be on his staff is over $450 billion.
00:54One big question on everyone's mind is, how does this high reward,
00:57high risk culture of Silicon Valley in particular,
01:00meld and mix with Washington and its slow moving bureaucracy?
01:04And that's something we're going to talk about today.
01:06My name is Madeline Berg. I cover wealth for Business Insider.
01:09I'm Peter Kofka. I cover media and tech for Business Insider.
01:12I'm Derek Robertson and I cover emerging tech
01:15and the politics of emerging tech for Politico's Digital Future daily newsletter.
01:19We've heard about Elon Musk. Who else is Trump surrounding himself with?
01:23David Sachs is probably not a household name unless you spend a lot of time on Twitter and technology.
01:29He's an entrepreneur, now a venture capitalist, now a podcast host.
01:33He was a big backer of Trump during the election
01:36and has been rewarded with a sort of vague title.
01:39Basically, he's going to oversee or advise on AI policy.
01:44I had to chuckle to myself when you said David Sachs and I immediately thought to myself,
01:48David Sachs, of course that's a household name.
01:50And then you said, if you spend a lot of time on Twitter,
01:52and I was like, OK, I am included in this category.
01:55The first person who came to mind to me thinking about this question is Jared Isaacman.
02:01Yeah, Trump's pick to be the NASA administrator.
02:04Isaacman became very wealthy as the head of a payment processing company
02:09and now is best known to the public as a sort of cheerleader for the private space industry.
02:16And he's widely expected to kind of grow the synthesis between SpaceX,
02:21the rest of the private space industry, and NASA
02:23that we've already seen growing under the first Trump administration.
02:26And one thing I thought that was particularly interesting about him
02:29is he really has a connection to what he's doing.
02:33I think that there are other billionaires who are in this administration
02:36who have nothing to do with what they've been put in charge with.
02:39Linda McMahon, secretary for education, she co-founded WWE.
02:44So that's like one where you're like, where did this come from?
02:48Is it just because of the donations?
02:50I think we are in a post-conflict of interest world.
02:53The first Trump administration was rife with those conflicts.
02:57Trump was somewhat restrained.
02:59He's not even pretending to be restrained.
03:00You know, there was a whole debate the first time around about
03:03what is his holdings go into a trust and, you know,
03:07what was his hotel empire do outside of the US.
03:11Whether he was subjected to the emoluments act.
03:13All of that stuff.
03:13And Trump learned in the first administration that he could essentially,
03:18the conflicts of interest are just ideas.
03:21I think it's worth pointing out the conflicts of interest,
03:23but I don't think it's going to restrain them in any way.
03:26Peter is completely correct.
03:27We are beyond conflict of interest because these people are essentially
03:30setting policy for fields that they stand to massively profit from.
03:33And I think that it's important to point out a lot of this is legal.
03:37A lot of these people are not part of the official cabinet.
03:39They don't have divestment policies.
03:41They don't have to report everything.
03:44So a lot of these kind of looser positions are completely legal
03:49in continuing to invest in AI as they advise on it.
03:53There is no shock anymore.
03:54This is just the way things are.
03:56This is the way America is.
03:57And I think a lot of wealthy people, members of various boards,
04:03it only took a little tiny nudge to accept that new reality
04:07because as it always is for business,
04:10it's best to be on the good side of who's in power.
04:13Can you specifically mention any policies that you think that they,
04:17that billionaires have their sights on that they think will really benefit
04:21the American, not just themselves, but the American people at large?
04:24AI is first and foremost, the sort of conventional wisdom is that
04:28we are entering an AI future.
04:30And the only issue is how is that power that AI is supposed to create,
04:37how is that going to be controlled or not controlled?
04:39That's sort of first and foremost.
04:41And then Andreessen, again, has been specific for years saying
04:45that the restraints that sort of have built up in Silicon Valley
04:50in the last eight years about platforms like Facebook ought to work
04:53and who ought to have responsibility for what should we learn
04:56from the mistakes of social media.
04:57And Andreessen's argument is what we should learn
05:00is to have zero regulation and sort of any sort of guardrails
05:03and we should just go, go, go as fast as we can.
05:06I think this is an underappreciated thing about Elon Musk,
05:09which is that he seems to have an extremely sincere belief
05:12in the idea that AI could just kill us all.
05:14But you have a diverse range of what this is going to do.
05:19The thing that ties them all together, I believe,
05:21is the belief that they are going to be the stewards of this technology
05:27and therefore that justifies their collaboration with government
05:31in setting policy terms and deciding how these technologies
05:34are going to be regulated or not.
05:36What about some of the non-BC billionaires that we're seeing,
05:38maybe not as part of the administration,
05:41but donating to the Inaugural Fund or showing up at Mar-a-Lago?
05:47I'm thinking of Tim Cook. I'm thinking of Mark Zuckerberg.
05:49What do we think about this Jeff Bezos kissing of the ring?
05:52Donating to inaugural committees is a long-held tradition in Washington.
05:57Some, like Zuckerberg, have never done that before.
06:00But it's incredibly transparent that no one is debating what's happening.
06:03They are trying to get on Donald Trump's good side.
06:06People are pointing out Tim Cook giving a million dollars.
06:08Tim Cook was one of the best sort of industry leaders
06:12at managing Donald Trump the first time around.
06:16Tim Apple.
06:17Tim Apple, he was happy to let Donald Trump take credit for things
06:22that he didn't do or literally weren't even true.
06:24He stood up with him at a press conference while Trump said,
06:26look at this factory that Tim Cook has built because of me.
06:29And none of that was true.
06:31And then privately, Tim Cook would be able to talk to Donald Trump
06:34and make sure that iPhones were not subject to the China tariffs.
06:38And I think everyone has picked up on that and said,
06:40all right, this is the way we're going to manage things going forward.
06:42For a very long time, Silicon Valley was really disconnected from government,
06:48really saw itself as separate from government.
06:51And Washington has sort of a disdain for it.
06:53And this is East Coast old school thinking along with New York media.
06:58We're on the West Coast. We're creating the future.
07:00We don't care what government does. We're going to build our own thing.
07:02Did the disdain go away or are they more willing to work through that?
07:07I think they still have enormous disdain for the government.
07:11I think what they've decided is we can get in there
07:14now using just sheer raw power backed by our money, created by our money.
07:19And we can reshape this the way we want.
07:21And we should do that rather than having our futures reshaped by these bureaucrats.
07:25Legal scholars have questioned what's possible.
07:28What can they do?
07:30And a number of their suggestion changes would have to go through Congress.
07:34How does the working style of billionaires, especially, I think,
07:37not only their working style, but their their sense of self,
07:41clash with Washington bureaucracy?
07:44I think that what this class of billionaires is going to discover about Washington
07:50is that Congress is, you know, for all their whatever disdain they may have for it,
07:55Congress is an extremely powerful institution that has an extremely
07:58powerful network of incentives that are completely different from the incentives of
08:03corporate or private governance.
08:05So that's why I think you see them focusing so much
08:10on implementing their recommendations through the executive branch,
08:12where frankly, they might be making or suggesting a lot of policy being made
08:16about subjects that, like we talked about before,
08:18Donald Trump doesn't really care that much about.
08:20So that avenue is far more conducive to the Silicon Valley mindset
08:25than working with Congress.
08:27Do you think there is going to be backlash among everyday Americans
08:31as we kind of become more aware of the billionaires winning
08:35because they're falling in line?
08:37Do people feel richer or poorer?
08:40Yeah, that's the question.
08:42It's entirely dependent on economic conditions.
08:44The dynamic that we saw during the first Trump administration was that
08:48if we had one of those days where you wake up in the morning
08:52and the Trump administration is doing something that we perceive
08:55is completely outright out of the mainstream,
08:57the next thing that followed would almost uniformly be
09:01for people on social media to note,
09:03here are all the corporations that still donate to do business
09:07with the Trump administration.
09:09Get in their face on social media and tell them that you're not OK with this.
09:13And I just don't think that dynamic is going to persist
09:16through the second Trump administration.
09:17I want to drill down a little bit on specific industries,
09:20starting with defense.
09:21Trump has appointed Steven Feinberg, the private equity billionaire,
09:24as the deputy defense secretary.
09:26And he has significant military and defense interests.
09:29Billionaires who have been tapped for military positions.
09:32What can we expect their approach to military spending and defense to be?
09:36The unique conditions that I have been personally watching
09:40or keeping an eye on for the second Trump administration
09:43are the efforts among startups and venture capital funded companies
09:48to sort of supplant, or if not supplant,
09:52at least compete with the major defense contractors.
09:55Lockheed Martins, the Boeings,
09:56by developing more sophisticated autonomous systems,
09:59surveillance systems,
10:01systems that depend on incredibly powerful AI tools.
10:03And that is the biggest change to military and defense policy
10:07that I anticipate to see under the second Trump administration.
10:10And again, Silicon Valley has always been tied to the military and technology,
10:13the deep, deep background there.
10:15But in recent years, you know, a lot of people,
10:17especially ones who made a lot of noise,
10:19organizing workers at places like Google would say,
10:21oh, we don't want Google to be involved in any part of military contracting.
10:24I imagine there'll be much less interest in hearing from employees or customers
10:30who are angry that Amazon or Microsoft or Google
10:33is working with the military and the government.
10:36I think there just won't be a lot of room for those complaints.
10:39I wanted to move over to health.
10:40And Derek asked you,
10:42what sort of deregulation can we see in spaces related to health,
10:46health technology, and who are the players in the Trump orbit
10:51that will have a stake in that?
10:53The main thing that comes to mind in the universe that we're talking about
10:57right here is Elon Musk's company, Neuralink.
11:00Neuralink is such a fascinating company because it sits at the intersection
11:04of AI, health technology, privacy issues.
11:09The idea that you could put a computer chip in your brain
11:12that is then collecting, transmitting information,
11:15interfacing with AI systems that are data sinks, essentially,
11:19that is one that is immensely fraught on every possible regulatory level.
11:25And I am fascinated to see what, if any, conflicts arise
11:29if Musk uses his proximity to the administration
11:32to try to break down some regulatory barriers for such a radical technology.
11:35Silicon Valley has been interested in health and medicine for a long time.
11:39Today, there's a ton of interest in biohacking and stuff like that,
11:44stuff that's on the margins of traditional health and traditional medicine.
11:48But there was definitely a period 10 years ago or so
11:51where Silicon Valley looked around and said,
11:52oh, we've disrupted media and other stuff.
11:54What can we go for next?
11:55Oh, health care.
11:56We'll go for that.
11:57It's the kind of business we love to take on.
12:00Sclerotic, slow-moving, no one likes it.
12:03We can figure out faster, better ways to disrupt this
12:07and essentially hit a brick wall.
12:08So moving to crypto, we've seen the price of Bitcoin skyrocket
12:12since Trump got elected.
12:13And Trump has promised, among his promises,
12:15to overhaul the crypto industry and crypto regulations.
12:20What kind of policy do you think we can expect to see
12:23coming out of this second administration?
12:25Crypto is one of these industries that we're talking about
12:27where the nascent lobbying network around it is very desperate for.
12:31They're always saying, we want regulatory clarity.
12:33Give us regulatory clarity.
12:34Put some regulations in place that allow us to operate
12:37without fear of liability.
12:39And what that will look like in practice,
12:41I think will be largely oriented toward
12:45transferring a lot of power for enforcing crypto regulation
12:49from the Securities and Exchange Commission
12:51to the Commodity Features Trading Commission,
12:53which is widely seen to be a more friendly regulator of crypto
12:56for various institutional reasons.
12:58That is something that I'm looking at legislatively.
13:03When it comes to what's under the power of the executive branch
13:07as headed by Donald Trump,
13:08I think it's subject to the same deregulatory powers
13:12that he plans to use for most everything.
13:13I mean, I think like Donald Trump has made pledges
13:16about making all Bitcoin mining happen in America,
13:19which is obviously not something
13:21even the U.S. president can make happen
13:22because Bitcoin can be mined anywhere.
13:24So what I think he's really saying is
13:26mining crypto requires enormous energy.
13:29I think what he's saying is
13:30we'd like to make those environmental issues go away.
13:33But he's also talking about creating a Bitcoin reserve,
13:36either where one version is
13:38the U.S. government actually owns a lot of Bitcoin
13:40and would they put that Bitcoin there
13:42or would they sell it off?
13:43And another version is the U.S. government
13:45actually go buy a lot of Bitcoin,
13:48which is just a direct wealth transfer
13:50from the U.S. government to people who own crypto.
13:53But I think the worry from a lot of people is
13:55if crypto is way more intertwined
13:58in Americans' day-to-day life,
14:00or even if it's not involved in their day-to-day life,
14:02but just big institutions have a lot of exposure to it
14:05and there's a Bitcoin crash, what does that mean?
14:07Do we see Silicon Valley titans
14:11anxious about those possibilities?
14:15Or are they more...
14:17They're go, go, go.
14:17They're go, go, go.
14:18What can we expect Congress,
14:20influenced by these billionaires
14:22and influenced by Trump, to do about taxes?
14:24I mean, I think that the people who we're discussing
14:29would take fundamental issue with the idea
14:32that they receive any special benefit from the government.
14:36Silicon Valley billionaires think
14:37that they are giving society more
14:39than society gets from them.
14:41They think that...
14:42They think they're beyond money.
14:44Yes, exactly, yes.
14:45Marc Andreessen said something to that effect.
14:46He said, if you think Elon Musk is doing this for the money,
14:49you're preposterous.
14:51Now, the flip side is, I do think
14:53if you have a billion dollars, you want more,
14:55whether or not you want to admit that to yourself.
14:57So they do want more money.
14:59But I think they would,
15:00if we hooked them up to a lie detector,
15:01they would say they honestly think
15:03they're doing this for the benefit of the country.
15:05There is so much economic inequality in this country,
15:08and on the face of it,
15:12and abstractly putting billionaires in power
15:14probably wouldn't help that,
15:17and wouldn't appeal to the people
15:19that the majority of Americans who voted Trump in.
15:22I don't know if that's true.
15:23Tell me.
15:24There's a lot of people who love the idea
15:26of billionaires and rich people,
15:27even though they're not rich,
15:28because they imagine they could one day be a rich person,
15:32and they admire billionaires and rich people,
15:34and they like that idea.
15:35They don't think a billionaire is a bad word.
15:38I think there's a difference between being a billionaire
15:41and being an elite,
15:42and Americans are maybe a little more resentful of the elite
15:45than of wealth in general.
15:47What about, how is the incoming administration
15:51and kind of the billionaires that are part of it,
15:54how are they being embraced or not embraced
15:57by kind of the establishment, GOP?
16:00And can you foresee any clashes there?
16:05I mean, one interesting thing to watch,
16:08less about the GOP and more about the MAGA coalition
16:11that elected Donald Trump, is schisms there.
16:14But essentially, it's a fight
16:16between the Steve Bannon wing of the Trump party
16:20and the Elon Musk wing of the Trump party.
16:23And to boil it down, for now,
16:25Trump said, Elon Musk is the guy I'm going with on this.
16:29But that is going to be an ongoing tension between,
16:32there's a whole bunch of people who voted for Donald Trump
16:35that have no interest in globalization,
16:38they really don't have a lot of interest in technology,
16:40and I think that's going to be the ongoing tension.
16:42This is a question that I did not have an answer to,
16:45but I'm curious if either of you do,
16:46which is, is there any upside
16:48in billionaires dabbling in politics?
16:52I think it's good for citizens to be in politics.
16:54We've always had people who have lots of money
16:57and power involved in government and policy.
17:00This version of it, where it's, you know,
17:02there's not even pretending to be embarrassed about it,
17:05not even pretending to sort of be offstage, that's new.
17:09But I don't think it's a bad idea for people
17:11who are successful and smart to participate in government.
17:16I agree with that.
17:17I think that it's underrated the extent to which,
17:22until relatively recently in United States history,
17:25we had much stronger guardrails
17:27against the extremely wealthy influencing campaigns.
17:32I am just barely old enough to remember that in 2000,
17:36John McCain made campaign finance reform
17:39a huge plank of his primary campaign,
17:42and it was essentially a signature issue.
17:46This was what separated him from George W. Bush.
17:49He was seen as more of an ally of the oligarchy,
17:54essentially.
17:54And campaign finance reform meant keep the influence
17:57of money out of politics or reduce it or have guardrails.
18:00Right.
18:01So if we're going to...
18:03There used to be just kind of this normative idea
18:06in American political life that it's okay for these people
18:09to participate in politics as long as we prevent them
18:12from having overweening or disproportionate influence
18:15compared to popular organization or civil society groups.
18:20That idea is gone.
18:22And do I personally think that's a salutary development?
18:26No.
18:27We're going to see what the downstream ramifications
18:30of it are in the years to come.