America’s incoming cryptocurrency/AI czar has a resume long on regulatory skepticism, short on industry expertise.
That’s according to a report Friday (Dec. 6) by Bloomberg News, looking into President-elect Donald Trump’s nomination of David Sacks to help shape the administration’s artificial intelligence (AI) and crypto policies.
Sacks, the report said, doesn’t have deep ties to either industry or a lengthy history of investments into them.
But for tech investors, Sacks brings something more important to the table: a technology-friendly attitude, and a long track record of doubts about government regulation, the report said.
“He will ensure the United States is at the cutting edge of innovation,” said Keith Rabois of Khosla Ventures, who argued Sacks will keep the U.S. from falling behind China, and will protect “newly emerging tech from left-wing censorship and bias.”
Sacks, the report said, has made just a handful of crypto and AI bets, though he has invested in Elon Musk’s xAI. As the founder of venture capital firm Craft Ventures — and like Musk and Rabois, a member of the so-called “PayPal Mafia” — he has become one of the VC industry’s “loudest right-leaning voices,” Bloomberg wrote.
Both AI and crypto executives, the report added, see government intervention as a threat, with several crypto companies moving overseas to avoid regulatory oversight.
“Crypto and AI are two of the United States’ most pressing strategic priorities right now, and David Sacks is one of the only people in the world that is uniquely qualified to lead in this pivotal role,” said Kyle Samani, a managing partner at Multicoin Capital, where Sacks is an investor. Sacks will be an “invaluable asset in shaping the nation’s future,” Samani added.
As noted here last month, Trump has said he would overturn President Joe Biden’s comprehensive AI executive order issued last year, arguing the rule hinders innovation.
Trump’s first term as president saw limited focus on AI, though he issued the first executive order dealing with the technology in 2019, requiring federal agencies to make AI research and development a priority.
As the new administration’s AI czar, Sacks, may have to address the need for infrastructure to support the technology.
“While foreign markets move quickly to build power systems for next-generation computing facilities, American utilities’ lengthy deployment timelines for new electrical capacity could redirect billions in tech investment abroad and reshape the global AI landscape,” PYMNTS wrote in November.
Block’s Cash App is reportedly making progress in its efforts to offer banking services to customers who mostly use the app to make payments.
The number of the app’s users who have their paychecks directly deposited into their Cash App account rose by 25% year over year to reach 2.5 million in December, Bloomberg reported Thursday (April 3).
This is a key metric because those who have set up direct deposit are most likely to use the company’s other banking services, according to the report.
Cash App’s efforts are meant to expand its customer base from the underbanked people it has traditionally served to anyone earning up to $150,000 a year, the report said. It has 57 million active users.
“Our long-term goal is to be the primary provider of banking services to the vast majority of Americans,” Block Executive Officer and Business Lead Owen Jennings said, per the report. “In order to do that, you need to cross the chasm in terms of reputation and brand recognition from a simple peer-to-peer app to a full-fledged suite of banking services.”
The company’s most recent efforts to promote its banking services include a marketing campaign in 15 cities in January and approval from the Federal Deposit Insurance Corp. to issue short-term consumer loans through Block’s Square Financial Services, the report said.
At the same time, Cash App faces challenges in drawing customers to its banking services. These include customers’ uncertainty about using the app for all their everyday banking; competition from FinTech rivals like Chime Financial, Robinhood Markets and PayPal Holdings’ Venmo; and a settlement with the Consumer Financial Protection Bureau in which the regulator found that Block’s investigations into unauthorized transactions on Cash App were “woefully incomplete,” according to the report.
Square Financial Services’ receipt of approval from the FDIC to make consumer loans directly to borrowers, using Cash App Borrow, represented a shift, PYMNTS reported last month. Before making the move, Square Financial Services focused on offering Square sellers business loans and savings accounts, and Block made the consumer loans through its external banking partner.
