One of the primary arguments of this newsletter is that tech is newly downstream of politics. For much of the 2000s-2010s, internet startups mostly operated with impunity, protected by Section 230 and the hope of a better tomorrow that would be ushered in with venture capital dollars. Now, two things have changed:
The dollars are so, so, so much bigger. Tech produced multiple trillions of dollars in outcomes over the last decade.
The cost of purchasing political influence became more palatable.
These two factors together mean that the government is going to get involved. We are in a modernist era of operating, one that shows that tech market outcomes are achieved, at least partially, through political favors.
The latest example is TikTok.
Back in 2020, Donald Trump went after the app. He signed an executive order forcing ByteDance, the Chinese owner of the wildly popular short-form video app, to sell its U.S. operations or face a ban. The stated worry was national security: TikTok hoovered up user data, and U.S. officials feared Beijing could use that firehose for espionage or influence campaigns. Courts blocked the order, but Trump had made his position plain. TikTok was a threat, and the U.S. government should shut it down if China wouldn’t give it up.
But then a curious thing happened. One of Trump’s largest donors, Jeffrey Yass, billionaire and co-founder of Susquehanna International Group, had a quiet meeting with Donald Trump in early 2024 at a donor event. Shortly afterward, Trump began softening his tone. Instead of promising to eradicate TikTok root and branch, he started asking whether banning it might actually make things worse. By the end of that year, Yass would donate roughly $100 million to Republican causes, with an additional $16 million donated to a Trump super PAC in 2025. And in the strangest of coincidences, Yass also happens to be one of the largest shareholders in Bytedance, with his stake in that company alone worth over $34 billion. For Yass, this action is entirely rational and incentivized. I would also spend .3% of my equity value to protect the entirety of my TikTok fortune.
As of this week, the about-face is complete. Trump is now celebrating a deal that would keep TikTok alive in the United States. The framework that leaked yesterday would be that Oracle, Silver Lake, Andreessen Horowitz, and other U.S. investors will collectively take an 80% stake in TikTok’s U.S. business, while ByteDance hangs onto a sliver of ownership and licenses its all-important algorithm. U.S. user data will live in Oracle-run servers on American soil. What once looked like an exorcism now looks like a corporate restructuring.
If you are wondering why Oracle, a company with a grand total of zero consumer company experience, won this bid, you could accept the answer that will likely be given in press conferences. Namely, that Oracle already runs TikTok’s U.S. data hosting out of Texas. The other answer is that Larry Ellison is a long-time Trump ally and Andreessen Horowitz’s cofounders have both donated millions to Trump, and Trump’s administration is staffed to the gills with former a16z employees. Andreessen himself helped recruit staffers for Elon Musk’s failed DOGE effort.
Trump once promised to ban TikTok as a tool of Chinese influence. Now, backed by a major donor whose wealth depends on ByteDance, he’s selling a solution in which the app continues almost unchanged, only with Oracle and friends as majority shareholders. What changed? The security threats didn’t go away; if anything, questions about algorithmic control and Chinese access are murkier than ever. What actually changed is the alignment of tech market money and politics.
Worse, this is not merely confined to one administration or party. The Fairshake super PAC, a crypto-focused lobbying fund, raised $260 million to back politicians who would support the cause of the coin, regardless of political affiliation. And it worked. The crypto regulatory regime has, again and again, come down in favor of the Fairshake’s proposals with support from both sides of the aisle. Marc Andreessen and Ben Horowitz donated over $12 million each to that fund.
It was so successful that the AI industry noticed. In August, the “Leading the Future” super PAC was launched with $100 million in funds from OpenAI President Greg Brockman, Trump ally Joe Lonsdale, and you guessed it, Andreessen Horowitz. For all of these people, this is pennies. It is a pittance compared to what they all stand to gain if AI continues to grow in value as it has over the last three years.
Both conservatives and liberals would likely agree that government favor should not be so cheaply purchased, but this is our current reality. Each player in this drama is acting as they are rationally, economically incentivized to. These are small amounts of money to donate relative to the prize of tech company success. After all, this is behavior long exhibited by other industries, and big tech has long spent money in D.C., but this is the first time it has become mainstream practice for the startup ecosystem.
On a recent podcast appearance, Andreessen argued that, “The thing you want from your VC is power.” He and other investors explicitly view their role as lending power to the companies in their portfolios. The tech industry is large enough now that lending political power is a real and valuable asset. It also isn’t just a16z engaged in this! Many other funds and Silicon Valley operators have operated as power donors with the Democratic Party, too.
While there are a couple of billionaires who read this newsletter (hi guys!) the rest of us are unlikely to be able to change how our markets currently function. Our lawmakers could alter campaign finance laws, or something, but this is a tech markets newsletter not a political one— I’ll leave it to other, more qualified commentators to opine on this dimension of the topic.
How it matters in the context of The Leverage is that no man is an island, and neither is a startup. When developing your strategy as a company, I would now advise spending some time considering how politics may help or hinder your growth. Otherwise you’ll just end up being beaten by someone who takes advantage of this new field of battle.
Discouraging. A16Z is the new Bechtel.
Evan, I had no idea. I would've never made the connections of all of these contributions being TikTok owners. But I am not surprised.
The Citizens United case is going to be the death of our Democracy.
I have news. Freedom of the press is under fire. It no longer belongs to me or you. It belongs to those who own one. I'm referring to Mr. Murdoch, Twitter, The Washington Post, and even The Atlantic, which Ms. Jobs owns.
Mr. Kimmel wasn't suspended after his on-air comments. He was suspended after Brendan Carr's comments a couple of days later.
I despair.