Silicon Valley is really just a few hundred people connected by favors and money. Most of us rely on this network, but few know how it really functions. This new column reveals the inner wiring of the American tech world.
Traditionally, the Valley’s message to Washington has been: keep out. Now Sam Altman is offering the government 5 percent of OpenAI – worth some $43 billion – as a gift. Quite a conversion. The Valley that once worshipped Ronald Reagan now warms to Donald Trump’s economics. The state already owns a slice of Intel and a cut of Nvidia’s chip sales to China. Bernie Sanders, meanwhile, has introduced a bill that would take half the equity of the biggest AI firms in a one-off tax; so for Altman, 5 percent seems a cheap insurance policy. Altman clearly needs the administration’s goodwill. The libertarians, it turns out, have been socialists all along. They just want to choose the commissar.
Spare a thought for Joel Feder, a Minnesota motoring journalist recently surrounded by four police cars thanks to a typo 2,000 miles away. Flock Safety, a pole-mounted camera system that logs every passing number plate, had told authorities Feder’s loaned Range Rover was stolen. There are 100,000 of these cameras in the US. Any police force can tick a box to share its data with the rest, so there is a national record of who drove where – something no legislature has ever voted for. The Supreme Court has ruled in a case against Google that tracking movements in bulk requires a warrant. Investors such Andreessen Horowitz and Peter Thiel’s Founders Fund may soon be flocking to the exit.
Dialog is a private club, co-founded by Thiel, that gathers the world’s power players to discuss the future, off the record. August’s retreat, at a five-star hotel in Ireland, promises sessions titled “Navigating WWIII” and, Kilby’s favorite, “Build-a-Cult.” This year, the membership list leaked. Dialog told members it had been hacked. In truth, nobody hacked anything: the club’s website was so badly built that its files were available to anyone who looked. Dialog is no longer run by Thiel but by its chairman, Auren Hoffman, a data broker whose own club left members’ details in the open. Among them: a NATO commander, the Treasury Secretary, two senators, a Palantir co-founder – graded by fame and fortune. So much for discretion.
IN OUR SIGHTS
Sun Valley
Every July, Allen & Co. gathers the titans of tech and media at an Idaho resort once famous for being the place where deals get done: it sparked Disney’s acquisition of ABC in 1995. No longer. Kilby hears it is simply an excuse for the big players to gossip and be seen. One insider says the bodyguards now outnumber the deals…
Thinking again
The gamble may have paid off for former OpenAI CTO Mira Murati, who raised $2 billion before she had anything to sell. Working with the hedge fund Bridgewater, her startup, Thinking Machines, has built a small, cheap AI model that reads financial filings with 29.8 percent fewer errors than anything the frontier labs can offer, at a 14th of the cost.
Forbidden fruit
Apple claims its lawsuit against OpenAI is about stolen trade secrets. Kilby believes it could also be about buying time. OpenAI is hiring Apple engineers and combing through its supplier network in a plot to loosen the iPhone’s grip. Litigation can achieve what engineers cannot: delayed prototypes, frightened suppliers and burying rivals in legal fees.
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