Power is power
OpenAI, New York, Trump
Shorter newsletter this week since I published (late) on Monday and have been sick since then. But this week I’ve been thinking a lot about power and politics.
OpenAI wants to be too big to fail
The WSJ mused whether “OpenAI is too big to fail” but it’s been increasingly clear where this is going:
Trump needs AI capex to keep booming and holding up growth. The economy is overall growing quite slowly and without the datacenter boom, would probably be in a recession. So, I speculated, the admin will announce a “strategic investment” or partnership with OAI as a national champion to keep funding the commitments. Sam has been making all the right noises and has all the right friends to court Trump, clearly with this goal in mind.
Then two days later OAI CFO Sarah Friar floated the concept of a “backstop” by the government to fund data center buildout.
So clearly I’m right and this is happening/going to happen. If it’s not already, OpenAI wants to be too big to fail so that it can get a backstop, lower its CoC, and undercut competitors. They are running out of places to fundraise to meet their commitments/plan for burn so its time to turn to the government. Duh.
OAI has since walked it back after a bunch of backlash but it’s coming, they just happen to have said the quiet part out loud a bit too early.
And it is obvious how this will work. USG will get a direct equity stake in OAI in exchange for loan terms (and maybe some upfront cash). OAI will become a GSE to continue the capex boom necessary to paper over an otherwise weak economy. It will look more like the Intel deal than US Steel.
Short term? This is probably net good for the average American because it will keep papering over weakness in trump’s economy (tariffs, shutdown, etc).
Long term, there’s a fine line between industrial policy and picking winners, graft, self dealing, etc. all of which undermine our markets and democracy.
The critical bottleneck for the public good isn’t compute from a single company, it’s plentiful renewable energy. Without more investment in renewable energy, we all suffer. Besides, those investments will depreciate much more slowly than the latest chips making them much better suited for government backing. The government should be supporting nuclear, wind, and solar - not picking winners in the data center market.
Talent Survey
Last week I published my hiring survey for venture funds. I’ve now got ≈50 jobs at ≈35 venture funds, most of whom I know well. To better do some matchmaking, I’m now running a talent survey. If you’re interested in potentially getting matched with/intro’d to opportunities, please fill it out.
Note: I’m not going to share the whole list for the sake of trust and anonymity.
Podcast
I had a fun convo (a great chat, if you will) with Helen and Ashley on their pod on the day of the election. My big takeaway is that if you’re consistently talking about politics at work, you’re probably just NGMI. Also covered: wearables, robots, and who takes the crown as the best (tech) CEO of all time.
Listen/watch on Spotify, Apple podcasts, and Youtube.
I Read
Abundance won—but our work’s not done - Abundance NY
Yesterday, New Yorkers decisively approved transformative changes to the city charter to speed housing production. We elected a mayor who promises a clean break from a broken status quo—unquestionably committed to housing affordability, public transit, and public sector capacity. And we elevated our foremost abundance champion to citywide office.
Over the final months of his campaign Zohran said the right things about moderating on key issues, staffing his admin with expertise, and bringing people together.
Now he’s on the clock to deliver.
Good luck!
New York Is Quietly Preparing Against Trump’s Takeover of the City - Politico
Last month, the governor invited a broad range of activist and labor groups — including the ACLU, the powerhouse local SEIU and grassroots network Indivisible — to her Manhattan office. At the meeting, she pleaded with them to work constructively with one another and New York officials to avoid the sort of violence or vandalism that could spur Trump to send in federal troops, as he did in Los Angeles this summer, according to officials present […]
The governor also organized a meeting of business leaders late last month, and is planning another next week, with a related objective: forging a united front across ideological lines to prevent a Trump takeover from happening at all.
Kathy Hochul is on this insane kick of actually being kind of great since the 2024 election? She’s grown a spine and stepped up on a ton of big issues (most notably congestion pricing and food assistance). Hopefully this bears fruit.