The (would-be) Senators from Silicon Valley

Presented by TSMC: How the next wave of technology is upending the global economy and its power structures

Oct 25, 2022 View in browser   By Derek Robertson Presented by TSMC Ohio Senate candidate J.D. Vance. | Drew Angerer/Getty Images Two weeks from today, America could accomplish another political first: Electing two U.S. Senators from the idiosyncratic, increasingly ideological world of Silicon Valley venture capital. Oh, and neither one is from California. As a political force Silicon Valley is mostly known for its money, which it donates mainly to Democrats (although those donations have slightly shifted right in recent years). But as a source of political ideas, it's something different, incubating a nationalist strain of conservatism better embodied by Blake Masters and J.D. Vance — positioned to potentially win Senate seats in Arizona and Ohio, respectively. (POLITICO's Steven Shepherd has Vance favored to win, and Masters as an underdog within shouting distance.) In a sense, both candidates are testament to one person's influence: Peter Thiel, the multi-billionaire tech investor who is a business and ideological mentor to both, and who funds their campaigns. But their politics aren't identical to Thiel's techno-libertarian views — they're a new take on conservatism with strong roots in the tech circles from which they come, and decidedly different from your garden-variety Republican in the rest of the country. In an April report for Vanity Fair, the writer James Pogue painted the two as high-profile avatars of the "New Right" — nationalist conservatives who don't share the same squeamishness as their libertarian forbearers in using state power to engineer economic or social outcomes, in the style of Hungary's Viktor Orban. Masters and Vance share a dark view of America as a country in crisis from which it might take "the proverbial machete" of the state, as Masters told Pogue, to escape. Both favor re-industrializing the country, stopping illegal immigration and cutting legal immigration, and, at least in theory, financial policies that would help single-income households start families. At the "Reboot" conference held earlier this month by the right-leaning Lincoln Network, Jai Malik, a venture capitalist and founder of a firm that invests in "rebuilding the American industrial base by solving hard engineering problems," spoke enthusiastically about the growing activist bent in the tech world as part of a panel titled "Disrupting American Industry." "We need folks that have made money in tech that are willing to inspire people like Blake Masters to go out and to go run a campaign and to go fix the country," Malik said. "The things that move the needle for most people are policy and campaigning, and we need more money and more minds in tech that are thinking about those kinds of things." Which there surely are. But if they do find themselves represented in the Senate next year, there will be some significant roadblocks. First and foremost, the institutional GOP is not necessarily on board with a more activist agenda (or, perhaps, any agenda, having declined entirely to offer a new policy platform in the 2020 election). It's expensive to use the state to "build" in the way politicians like Masters and Vance imagine – and, policy platform or no, the GOP has made it very clear that budget-slashing is on the menu for 2023 should they take hold of the House. The relationship is frosty, at best, between Masters and Vance and the party's institutional leader, Senate Minority Leader Mitch McConnell: Vance has expressed deep ambivalence about McConnell remaining in leadership should the GOP take power, and the McConnell-linked Senate Leadership Fund pulled support for Masters last month amid lackluster polling. I emailed Neil Chilson, a research fellow at the free-market Charles Koch Institute, with some questions about the Vance/Masters version of Republicanism and got a very skeptical email back: "The 'divide-the-economic-pie' industrial policies that Vance and Masters have supported will limit the U.S.' ability to grow," he wrote. "We need growth and abundance to counter China's influence and to address the legitimate economic and social concerns, some of which Vance and Masters have been highlighting, [but their] proposals will exacerbate the problems they worry about." Finally, there's the uncomfortable truth that much of what makes their platform unique within the GOP carries an unsavory whiff of bipartisanship. Vance himself begrudgingly called the recent "Chips and Science" act a " great piece of legislation " in his debate with opponent Tim Ryan, and even some stalwart blue-state Democrats like Sen. Chris Murphy are now decrying the legacy of neoliberalism. Those political realities might combine to make their attempt to grab the GOP's steering wheel seem like a fringe pipe dream — but, then again, so did that of Pat Buchanan in 1992, and he's now largely considered a John the Baptist-style figure for the nationalist populism that now dominates the party. Masters, Vance, and their fellow "builders" are young and well-financed and pointedly ideological. Whether both, one, or neither of those two make it into the Senate come January 2023, they're ignored at the peril of the institutions they hope to supplant.   A message from TSMC: Since its founding 35 years ago, TSMC has worked with startup companies to accelerate semiconductor innovations in America by providing access to the most advanced computer chips in the world. This year, we welcomed 19 American customers to exhibit at our Technology Symposium Innovation Zone where event attendees were able to explore firsthand how they achieved success by partnering with TSMC. Their success validates the passion and value TSMC brings to this robust and vibrant ecosystem worldwide. Learn more.   a practical use for blockchain What, why, and how can Web3 do better than the current, blockchain-free iteration of the internet? A group of venture capital heavy hitters has come together to tackle those questions in at least one instance, funding a project called Spindl — which writer and investor Antonio García Martínez announced in a blog post last week as "the first real way to do measurement and attribution in Web 3." Spindl's ambitious goal is to essentially reinvent on the blockchain the economic foundation of the ad-revenue-driven internet: The user-acquisition metrics that account for the fortunes of companies like Meta and Google. Like a lot of Web3 talk, the post is pretty wonky. (As Martínez writes, "We're not summing the prices in your online shopping cart anymore. Matters have gotten complicated.") The fundamental concept, however, is fairly easy to understand: Spindl's developers want to create a permanent, objective, easy-to-access record on the blockchain of exactly how user engagement and acquisition occur, in contrast to the various competing models by which they're currently measured. That particular problem is a natural fit for the technology, which at its core is ultimately just the keeping of a(n incredibly complicated) series of ledgers. If Spindl succeeds in solving it, it'll be a rare and powerful practical use case for blockchain.   A message from TSMC:   re-centralized SEC chief Gary Gensler. | Brendan Smialowski/Getty Images The crypto world's already-fraught relationship with SEC chief Gary Gensler just got a little more tense. In a speech yesterday before the Securities Industry and Financial Markets Association conference, Gensler called the crypto world out as part of a promise to crack down on centralization in financial markets, saying despite the field being "founded on the idea of decentralization," it "actually has significant concentration among intermediaries in the middle of the market." The comments came in the context of Gensler's larger push to make the SEC a muscular enforcer of competition in finance. As POLITICO's Declan Harty reported for Pro subscribers yesterday, it "comes as the agency pursues a series of rule changes aimed at lifting up new and old players in certain markets where some of the world's most significant financial companies have been able to consolidate power." — the comparison to which is especially pointed for the crypto industry, whose foundational promise is that it's everything those companies are not. "While Chair Gensler argues aspects of crypto are centralized, the open source and permissionless decentralized networks inherent to the crypto ecosystem solve many of the problems raised in the speech about competition," Blockchain Association Executive Director Kristin Smith responded in a statement. "Indeed, crypto networks provide transparency and access — two of the tools Chair Gensler argues are needed to ensure competition in financial markets."   NEW AND IMPROVED POLITICO APP: Stay up to speed with the newly updated POLITICO mobile app, featuring timely political news, insights and analysis from the best journalists in the business. With a fresh look and improved features, the sleek and navigable design offers a convenient way to access POLITICO's scoops and groundbreaking reporting. Don't miss out on the app you can rely on for the news you need, reimagined. Already a POLITICO app user? Upgrade today! DOWNLOAD FOR iOS – DOWNLOAD FOR ANDROID .     the future in 5 links A Meta investor is advising the company to pump the brakes on the metaverse. Apple is tightening its rules on NFTs sold through the App Store. Bloomberg's Matt Levine offers his version of a definitive crypto explainer. Sam Bankman-Fried told The Atlantic crypto policymaking has been "fairly bipartisan, and I just hope it can stay that way." Shutterstock is partnering with OpenAI to create new stock images. Stay in touch with the whole team: Ben Schreckinger (bschreckinger@politico.com); Derek Robertson ( drobertson@politico.com ); Steve Heuser (sheuser@politico.com); and Benton Ives (bives@politico.com). Follow us @DigitalFuture on Twitter. If you've had this newsletter forwarded to you, you can sign up and read our mission statement at the links provided.   A message from TSMC: Since its founding 35 years ago, TSMC has worked with startup companies to accelerate semiconductor innovations throughout the world by providing access to the most advanced computer chips in the world. Our partnership with these startup customers allows them to invest in next-generation semiconductor design and innovation rather than in capital-intensive manufacturing, which has given them the flexibility to innovate broadly and creatively. This year, we were thrilled to welcome 19 American customers to exhibit at the first-ever in-person Innovation Zone where event attendees were able to explore firsthand how they achieved success by partnering with TSMC. Their success validates the passion and value TSMC brings to this robust and vibrant ecosystem worldwide. We are committed to supporting the startup community in this exciting period of transformation and truly honored to be growing together with them. Learn more.     STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today .       Follow us on Twitter Ben Schreckinger @SchreckReports Derek Robertson @afternoondelete Steve Heuser @sfheuser Benton Ives @BentonIves   Follow us

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