WSJ Tech News Briefing: Meet David Sacks, Trump’s AI and Crypto Czar
Release Date: December 16, 2024
Host: Belle Lin

1. Google’s Quantum Computing Leap with Willow Chip

Introduction to Willow
Belle Lin opens the episode by highlighting a significant development in quantum computing. Google has unveiled its new in-house quantum chip, Willow, which has notably boosted Alphabet's stock by nearly 12% in the previous week.

Understanding Quantum Computing
Dan Gallagher, a columnist for WSJ's Heard on the Street, provides an in-depth explanation of Willow:

“[Dan Gallagher, 01:39] It’s a chip that’s designed to essentially do quantum computing, which is this complicated concept of using quantum mechanics to build like a type of supercomputer that’s far beyond the computational capabilities of anything we have today. Just as a case in point, in one of their test modules, they’re able to perform like a series of calculations in a matter of minutes that would have taken something like millions of years using today’s standard computing.”

Potential Applications and Implications
Gallagher elaborates on the vast possibilities and challenges posed by quantum computing:

“[Dan Gallagher, 02:17] Theoretically, quantum computing has potential applications in being able to design things like drugs and medicines down to the molecular level. You could like theoretically perform hyper accurate weather forecasts much further out because you need that kind of computing power to take in all the data about weather patterns and atmospheric and so forth. One darker aspect is quantum computing could probably break current encryption algorithms. So it’ll have if we ever get to the day where quantum computing is kind of out there commercially, there’s going to be a lot of interesting debates and applications and probably scary stuff too.”

Skepticism Surrounding the Stock Surge
Despite the impressive announcement, Gallagher advises caution regarding the stock jump:

“[Dan Gallagher, 03:36] I don’t think it’s amazing so much to be skeptical on the bed. It’s a big bounce, like it’s about 250 billion in market cap for them on something that’s years away from any sort of commercial application... it was kind of a pretty big jump considering that this is not something that’s gonna be even close to being nearer midterm for the business.”

Conclusion on Quantum Developments
Gallagher concludes that while Google’s advancements are promising, quantum computing remains in its nascent stages with commercial applications years away.

2. David Sacks: From Silicon Valley to the White House

Introduction to David Sacks
Belle Lin transitions to the main feature of the episode: David Sacks, appointed by President Elect Donald Trump as the White House’s AI and Crypto Czar. Ralph Winkler, the reporter, delves into Sacks's background and potential influence on tech policy.

Early Life and Career
Sacks's journey begins in South Africa, moving to Tennessee at a young age. His early connection with Stanford University and the Stanford Review, a conservative libertarian newspaper co-founded by Peter Thiel, shaped his conservative provocateur persona.

“[Rolf Winkler, 06:15] He came here pretty young, probably around five years old. He was born in South Africa, really... he really, you know, started honing the Persona of a conservative provocateur that we’ve seen ever since.”

Reputation in Silicon Valley
In a typically liberal stronghold, Sacks stands out as a prominent Republican voice. His success and wealth have made him influential, especially among conservatives in the tech industry.

“[Rolf Winkler, 06:49] You know, he’s Republican in a place where it’s often been taboo to be Republican. Some of that has changed in part because of him this year, certainly when Elon Musk jumped on the Trump bandwagon and then Andreessen Horowitz... He co wrote a book with Peter Thiel when he was in law school, and then they were among the founding team of one of the two companies that became PayPal.”

Personal and Professional Style
Contrary to his public combative image, Sacks is described as introverted and prefers solitude for deep thinking, often working away from the typical Silicon Valley buzz.

“[Rolf Winkler, 08:05] He’s an introverted guy and somebody who’s not the open plan, Silicon Valley type. David would prefer to sit and think in his office is how he’s been described to us at.”

Controversial Stances and Influence on Policy
Sacks is known for his outspoken views, particularly against U.S. involvement in the Ukraine war and advocating for a friendlier regulatory environment for crypto and AI under a Trump administration.

“[Rolf Winkler, 08:48] Well, one big thing is the Ukraine war. He is very opposed to the US Involvement in supporting the Ukrainians. He thinks it’s a lost cause... They want a friendlier regulatory environment than they feel they were going to get under Biden and then a Harris administration. They think they can get a friendlier environment, certainly for crypto under a Trump administration.”

Potential Conflicts of Interest
Winkler highlights concerns regarding Sacks's extensive investments in AI and crypto, which could intersect with his governmental role, potentially leading to conflicts of interest.

“[Rolf Winkler, 09:26] ...you need to divest yourself of investments where there’s a clear overlap between the area you’re regulating and the area where you’re investing or you need the President to give you a waiver... it seems unlikely that he’s going to divest himself of all the various AI and crypto investments he has. So we’ll see how that plays out.”

Implications for Tech Regulation
Sacks’s appointment signals a potential shift in tech regulation, moving away from the Biden administration's approach. The tech and crypto communities anticipate a less combative regulatory stance.

“[Rolf Winkler, 10:25] ...Gary Gensler, who was running the SEC under the Biden administration, was somebody who was not well loved by the crypto community... It’s indicative of the approach Trump is going to take to put people like Sachs in a position to influence policy. It’s certainly going to be less combative than it was with Gensler and the people in the crypto community. They favor that.”

Key Takeaways

• Google's Willow Chip represents a significant, albeit early-stage, advancement in quantum computing, with potential applications ranging from drug design to weather forecasting, while also posing risks to current encryption methods.

• David Sacks’s appointment as the White House AI and Crypto Czar underscores a strategic move towards a more conservative and business-friendly regulatory environment in the tech sector, though it raises questions about potential conflicts of interest due to his substantial investments in related fields.

• The episode emphasizes the continuous interplay between technological innovation, market dynamics, and political influence shaping the future of the tech industry.

Produced by Julie Chang with supervising producer Katherine Millsop.