The cameras are off, the microphones are gone, and David Sacks is still talking.
Not to reporters, but to billionaires.
In a private dining room in San Francisco, lit by soft amber sconces and surrounded by half-finished plates and glowing phones, a small circle of founders leans toward the man now known in Washington as Trump’s AI and Crypto Czar. He isn’t just another Silicon Valley investor tonight. He is the bridge — or the weapon — between the tech elite and the federal government.
What he tells them behind closed doors may shape how artificial intelligence is regulated in the United States.
What he owns behind closed doors may shape how much he personally profits from it.
And that is where the story begins to fracture.
The Bombshell: Hundreds of Bets, One Powerful Desk
The New York Times investigation hit like a depth charge in the middle of an already polarized tech-political world.[1][2][3] Buried in ethics paperwork and obscure legal designations was a blunt reality: while serving as the White House’s top adviser on AI and crypto, David Sacks still holds stakes in more than 400 companies tied to AI and related technologies.[1][2][3]
Those companies are precisely the ones that stand to gain — or lose — depending on how Sacks helps write the rules.[1][2]
Ordinarily, that would be a hard stop. Federal conflict-of-interest laws are designed to prevent officials from shaping policy in ways that enrich themselves. But Sacks is not an ordinary official. He is classified as a “Special Government Employee” — a category that gives the White House enormous flexibility to waive traditional ethical guardrails.[1]
Public Citizen, a Washington watchdog group, put it bluntly: Sacks has “positioned himself to personally benefit” from his role and should resign.[1] One of their democracy advocates described the special employee law as a vehicle that has allowed people “to enrich themselves from their government jobs at the expense of the American people.”[1]
Ethics experts outside government are even less diplomatic. Kathleen Clark, a government ethics scholar, says the waivers Sacks received are essentially a preemptive pardon.[2] In her words, it is “basically carte blanche to influence U.S. policy on artificial intelligence in a way that may have… an enormous impact on his personal finances.”[2]
The Executive Order That Changed the Map
The conflict exploded into view the moment President Trump signed his new executive order on AI.[2][4]
The order does something deceptively simple: it aims to wipe out or weaken state-level AI laws by setting a single national standard and punishing states that try to go their own way with lawsuits and funding threats.[2][4] To industry, this is “preemption” — the idea that the federal government should override a patchwork of local rules. To critics, it’s a power grab.
The architect of that order? David Sacks.[2]
In practice, the order hands a major win to large AI companies and investors who fear getting tangled in 50 different sets of rules.[2][4] It centralizes power in Washington — specifically, in the office where Sacks sits. It also just happens to benefit exactly the types of companies he and his venture fund, Craft Ventures, have backed hundreds of times over.[2][3]
On paper, Sacks did divest from some big-name holdings like Amazon, Meta, and Elon Musk’s xAI.[2] But the waiver documents show that he and Craft are still holding “hundreds” of positions in AI-linked firms.[2][3] For an ethics lawyer, that’s not a gray area. That’s the whole canvas.
Inside the Ethics Loophole
At the core of this drama is a mechanism almost no ordinary voter has heard of: the ethics waiver.
When Sacks joined the administration, the Office of Government Ethics signed off on waivers that effectively said: yes, he has conflicts, but he is allowed to act anyway.[2] Clark calls it something even starker: “like a presidential pardon in advance.”[2]
To understand why that matters, imagine a referee at a championship game who also holds stock in one of the teams — and then receives a letter from the league saying: you’re exempt from the rules against betting; call the game however you like.
Sacks insists he is sacrificing, not cashing in. On his podcast “All-In,” he told listeners he had divested “hundreds of millions of dollars” in promising tech positions, saying the job has “cost me a lot of money to serve.”[2] He also points out that government ethics officials reviewed his waivers and concluded he had no disqualifying conflicts.[2]
But the question is no longer just whether the setup is legal. It is whether it is legitimate.
One Family, One Algorithm, and No Say
Picture a teacher in Ohio — we’ll call her Maria — already juggling two jobs and a student loan bill that never seems to shrink.
She learns that her school district is adopting a new AI system to flag “at‑risk” students, backed by a startup she has never heard of. The system will influence who gets counseling, extra help, maybe even discipline. Parents aren’t asked. Teachers aren’t trained. The company cites “proprietary algorithms.”
Maria goes online to learn who built this thing. She finds out the startup is in the portfolio of a major venture fund tied to the White House’s AI adviser. She also reads that a new federal executive order is blocking her state from passing stronger transparency rules of its own.[2][4]
To Maria, it doesn’t feel like innovation. It feels like decisions about her students — their futures, their labels — are being made in secret rooms thousands of miles away, by people who may profit if the system spreads.
That disconnection is what turns an obscure ethics waiver into a kitchen-table issue.
Silicon Valley vs. The Populists
The backlash has been anything but quiet.
On one side, Silicon Valley power brokers have rushed to defend Sacks. Tech CEOs and venture capitalists, including figures like OpenAI’s Sam Altman, publicly praised him after the Times exposé, framing him as a visionary ally in Washington under unfair attack.[3] Their message is clear: Sacks is the rare insider who “gets” them and is willing to push back on what they see as overbearing regulation.[3]
On the other side, hardline populists inside Trump’s own orbit are sounding alarms. Former White House strategist Steve Bannon has blasted Sacks for siding with tech’s drive for unfettered growth over safety.[2] Bannon complains that the U.S. has “10 times more regulations to open a nail salon” than to advance one of the most powerful — and potentially dangerous — technologies ever created.[2]
He worries not just about AI risk, but about a looming bailout: a scenario where, if the AI bubble bursts, the same network of insiders who fueled it will turn to Washington for rescue.[2]
Inside this tug-of-war, Sacks has already survived purity tests that took down other tech-aligned figures who once ran afoul of MAGA loyalties.[3] Despite past support for Democrats and non‑Trump Republicans, he has become too strategically valuable to discard easily.[3]
What’s Next / Could It Happen Again?
The David Sacks saga is more than one man’s résumé. It is a preview of a new era, where venture capitalists don’t just fund the future — they write the rules that govern it.
Watchdogs are calling for sweeping reforms: tightening or abolishing the Special Government Employee category, banning broad conflict-of-interest waivers, and requiring real-time disclosure of any investments that intersect with policy work.[1] Some members of Congress are signaling interest in hearings on AI governance and financial conflicts, though no major legislative response has landed yet.[1][2]
Meanwhile, AI systems are racing into classrooms, hospitals, police departments, finance, and defense. Each deployment raises the same question: who decided this, and what did they stand to gain?
Could it happen again? Absolutely. The legal architecture that allowed Sacks to keep hundreds of stakes while steering national AI policy is still in place.[1][2] Unless that structure changes, he is less an exception than a template.
So as AI spreads into every corner of daily life — from your kid’s school to your mortgage application to your next job interview — one question hangs over the code, the contracts, and the conflicts:
Do you want the people regulating the future to be the ones betting on it?
FAQ
Q1: Who is David Sacks in Trump’s AI policy world?
David Sacks is President Trump’s top adviser on artificial intelligence and crypto, often dubbed the White House “AI and Crypto Czar,” responsible for shaping federal AI rules and strategy.[2][4]
Q2: What is the controversy around his AI investments and conflicts of interest?
Investigations found Sacks and his firm, Craft Ventures, retained more than 400 stakes in AI-related companies while he was helping design AI policy, raising major conflict-of-interest concerns.[1][2][3]
Q3: How does the new federal AI executive order affect state AI regulation?
The order pushes for a single national AI standard and attempts to undercut stricter state AI laws through preemption, lawsuits, and potential funding penalties for states that resist.[2][4]
Q4: What is a “Special Government Employee” and why does it matter here?
A Special Government Employee is a temporary federal role that allows looser ethics and disclosure rules; critics say this status let Sacks bypass standard conflict-of-interest safeguards.[1]
Q5: What are AI ethics waivers and why are experts alarmed?
Ethics waivers are documents that exempt an official from some conflict rules; in Sacks’ case, experts say they functioned like advance permission to influence AI policy despite deep financial ties.[2]
Q6: How are watchdog groups and Congress responding to the Sacks AI ethics issue?
Groups like Public Citizen are calling for his resignation and for Congress to overhaul the Special Government Employee law and tighten AI governance ethics.[1]