David Sacks of PayPal fame in the AI and crypto czar in the Trump administration. Yet the role he plays has sparked deep controversy for its possible conflicts of interest. He’s one of the sharpest, most contrarian minds at Craft Ventures. There, he continues to influence federal policy against artificial intelligence and cryptocurrency mostly sundowning his commercial interests. This dual engagement has gotten them in hot water with lawmakers and ethics gurus.
Upcoming as Sacks’ arrangement is forcing him to walk a tightrope of conflicting ethics, especially with his own financial ties to the industries that he oversees. He has been granted at least two ethics waivers. That way, he can continue to stake federal policy while holding investments in the sectors he’s in charge of regulating. This has caused serious concern as to whether these practices are proper in the context of government service.
Critics responded quickly, with Senator Elizabeth Warren among those criticizing Sacks’ dual roles. She stated, “Normally, federal law would prohibit such an explicit conflict of interest.” Her comments point to larger concerns that Sacks’ perch will undermine impartial rulemaking in the fast-changing tech world.
In addition to his governmental duties, Sacks has sold stakes in several fast-growing companies, including his position in Elon Musk’s xAI. He’s pioneered the auctioning of stakes in nearly 90 such VC funds, including the ones tied to Sequoia Capital. Given the public nature of his current responsibilities as Mayor, these transactions highlight the contradiction between his public duties and private financial interests.
Sacks holds ostentatious galas for titans of the crypto industry. One in particular is a $1.5 million per person dinner while he singles handedly shapes the federal crypto policy. His impact doesn’t stop at just being a part—he directly works with the leadership of industry to help shape the regulations and standards of tomorrow. For one thing, he organizes a three-day-long annual conference. Participants fork over $7,500 apiece to participate in the super-exclusive conversations centered on AI and crypto.
Though all this might seem overwhelming, Sacks, as a federal government employee, is limited to no more than 130 days of government work per year. When he’s not on tour, he keeps himself busy with his entrepreneurial pursuits. This begs the question to a greater extent of how engaged he actually is in either space. A financial disclosure from March shows Girard’s crypto investments. In June, a separate report detailed his AI investments and unveiled just how deeply linked his finances are.
Craft Ventures is now under even more scrutiny because of the special role Sacks played in government. The firm is required to run every AI and crypto-related deal past the White House ethics committee. This requirement underscores the web of conflicts added by Sacks’ double duty. His 3.8% ownership of Vultron now expands the narrative of conflicts. More than that, it reveals the tangled skein of constituencies that shapes each day of his work life.
One of the foremost and original open data advocates, experts have sounded off as to the implications of Sacks’ tenor. Professor Kathleen Clark focused on the challenges presented when it comes to prosecuting our public officials. She argued that when they work in the “creatively destructive space” between government and private enterprise, that gets more challenging if not impossible to do.
