Latest news with #CraftVentures
Los Angeles Times
6 days ago
- Business
- Los Angeles Times
Tech companies want to move fast. Trump's ‘AI Action Plan' aims to remove ‘red tape'
The Trump administration on Wednesday laid out a plan that aims to make it easier for companies to quickly develop and deploy artificial intelligence technology. The initiative shows how Silicon Valley tech executives who backed Trump during the election are shaping federal policy that will impact their businesses as they compete globally to dominate the AI race. 'Artificial intelligence is a revolutionary technology with the potential to transform the global economy and alter the balance of power in the world,' said David Sacks, the White House's AI and crypto advisor, in a statement. 'To remain the leading economic and military power, the United States must win the AI race.' Sacks is a co-founder and partner at Craft Ventures, a venture capital firm in San Francisco. Tech companies have forged stronger ties with the Trump administration by donating money, showing up at high profile events such as his inauguration and showcasing their U.S. investments. Shortly after Trump took office, OpenAI, Oracle and Softbank announced that they planned to invest a total of $500 billion in AI infrastructure over the next four years. Billionaire Elon Musk, who runs Tesla and SpaceX, donated more than $280 million to the 2024 election and was tasked with slashing government spending. Apple, which has faced criticism from Trump for building its iPhones overseas, said it would invest $500 billion in the United States. The AI plan underscores how Trump is taking a different approach to AI regulation than his predecessor, former President Biden, who focused on AI's benefits but also potential risks such as fueling disinformation and displacing jobs. Trump had revoked Biden's executive order in January that placed guardrails around AI development. Tech companies started investing in artificial intelligence long before the rise of the popularity of OpenAI's ChatGPT, a chatbot that can generate text and images. But the emergence of more rivals has sparked a fierce competition among companies that are trying to release new AI tools that could reshape industries from healthcare to education. The rapid pace of technological development has raised concerns about whether the government is doing enough to regulate tech companies and safeguard the public from AI's potential dangers. Some fact-checkers have noted that AI chatbots can spew out incorrect information. Parents are worried chatbots their children use could pose a threat to their mental health. But regulation has a tough time keeping pace with how fast technology moves. The government also has to balance concerns that too many rules can hinder how quickly companies can release new AI-powered products. As major tech giants from Google and Meta face OpenAI, the maker of ChatGPT, they're also going head to head with rivals in other countries including Chinese AI company DeepSeek. The plan outlines removing 'bureaucratic red tape' and 'onerous federal regulation' that would make it tougher for companies to quickly build and develop AI technology. It also mentions revamping permits for data centers, infrastructure needed to power AI systems. Data centers house computing equipment such as servers used to process the trove of information needed to train and maintain AI systems. But the amount of water and electricity data centers consume concerns some environmentalists. Ahead of the plan's release, more than 80 civil rights, labor and environmental groups signed a 'people's AI action plan.' 'We can't let Big Tech and Big Oil lobbyists write the rules for AI and our economy at the expense of our freedom and equality, workers and families' well-being, even the air we breathe and the water we drink — all of which are affected by the unrestrained and unaccountable roll-out of AI,' the competing plan said. The White House's plan also tries to address one of the biggest concerns about the rapid deployment of AI: the potential that technology could replace humans in some jobs. The building of infrastructure to power AI systems, for example, will create high-paying jobs for Americans, the plan said. 'AI will improve the lives of Americans by complementing their work — not replacing it,' the plan said. It also said that AI systems must be free from bias. The plan recommends that the National Institute of Standards and Technology eliminate references to 'misinformation, Diversity, Equity, and Inclusion, and climate change' in its AI risk management framework. The plan emphasized the importance of national security. It mentioned that the U.S. should export its 'full AI technology stack' that includes hardware and software to its allies and partners but deny advanced AI to its foreign adversaries. Some tech executives on Wednesday quickly praised the AI plan. Box Chief Executive Aaron Levie said that the plan is 'quite strong.' 'It has a clear a mission to win the AI race and accelerate the development and use of AI by removing roadblocks or aiding adoption. Importantly, it focuses on the positive benefits of AI, which we're all seeing every day,' he wrote on X. Fred Humphries, Microsoft's corporate vice president of U.S. Government Affairs, also praised the plan. 'President Trump's plan will accelerate infrastructure readiness so AI can be built and used here, and help students and workers with skills needed to win in an AI-powered global economy,' he said on X.
Yahoo
19-07-2025
- Business
- Yahoo
David Sacks and the blurred lines of government service
When Vultron announced its $22 million funding round earlier this week, the AI startup made sure to highlight a key investor: Craft Ventures, the firm 'co-founded by White House AI adviser David Sacks.' The announcement has raised questions about conflicts of interest in the Trump administration, where Sacks serves as both AI and crypto czar while maintaining his role at Craft Ventures — an arrangement that critics see as a new model of government service where the lines between public duty and private gain have become unclear. Sacks has secured not one but two ethics waivers allowing him to shape federal policy while maintaining financial stakes in the very industries he oversees. The first, an 11-page document from March, covers his crypto investments. The second, issued in June, specifically addresses his AI holdings. Together, they've enabled what ethics experts call an unprecedented arrangement. 'This is graft,' said Kathleen Clark, a Washington University law professor specializing in government ethics, after reviewing Sacks' crypto waiver. 'This is a lawyer in the White House Counsel's office doing Trump's bidding, letting [Sacks] make money while insulating him from criminal liability.' Clark's analysis is critical. She notes the waiver discusses percentages of Sacks' total assets – when it was signed, his stake in Craft's overall portfolio represented less than 3.8% of his total assets, for example – but never reveals actual dollar amounts. 'The fact that this interest is just 3.8% of someone's total assets, that's something if you're talking about a law professor. But 3.8% of this guy's assets is a heck of a lot of money,' Clark said. Clark also argues that the waiver fails to consider any consideration of potential upside. Federal regulations require examining not just current value but 'potential profit or loss.' For a venture capitalist like Sacks, Clark notes, 'even if right now [if his shares are] less than 3.8% of his assets, if it does well, it could be more than that.' Craft Ventures did not respond to several requests from TechCrunch this week to discuss this story. The Vultron investment The timing of Vultron's announcement illustrates the complexity. Vultron creates AI tools specifically for federal contractors, helping them win government contracts more efficiently. The company boasts of reducing proposal timelines 'from weeks to days' and claims one Fortune 500 client now saves 'more than 20 hours per user each week' on federal contracting work. A source close to the company says Craft Ventures' investment predates Sacks' government appointment. However, the timing raises questions: the nation's AI czar has a financial stake in a company that profits from helping businesses win the very federal contracts his policies will influence. Senator Elizabeth Warren has been among the most vocal critics of these arrangements. In a May letter to the Office of Government Ethics, the ranking member of the Senate Banking Committee questioned Sacks' crypto waiver, noting he was simultaneously 'co-hosting a $1.5 million-a-head dinner for crypto industry players' while shaping federal crypto policy. 'Mr. Sacks simultaneously leads a firm invested in crypto while guiding the nation's crypto policy,' Warren wrote. 'Normally, federal law would prohibit such an explicit conflict of interest.' Sacks has largely dismissed Warren's concerns, accusing her of having a 'pathological hatred for the crypto community.' He has separately said that he sold a fortune in crypto before joining the White House 'because I didn't want to even have the appearance of a conflict.' Indeed, supporters of Sacks point to the sacrifices he's made for government service. According to his waivers, he and Craft Ventures have divested over $200 million in digital assets, with at least $85 million directly attributable to him. He has sold stakes in fast-growing companies, including his position in Elon Musk's xAI, and initiated the sale of interests in approximately 90 venture capital funds, including Sequoia funds. The source close to Sacks emphasizes these divestments, noting that because of his government role, Craft Ventures must now run every AI and crypto-related deal past the White House ethics committee. This oversight, they suggest, makes it implausible to invest in feeder funds and smaller deals, given the volume of work that might entail for everyone involved. Clark argues that the underlying ethical framework remains flawed. The waivers themselves, she argues, are designed to provide legal cover rather than address ethical concerns. 'This is whitewashing,' she said. Complicating matters further, Sacks works as a government employee just 130 days per year – effectively every other week – while maintaining his commercial activities during off periods. In September, for example, Sacks and his co-hosts in their popular podcast, All In, will stage what has become an annual three-day conference to which attendees pay $7,500 per person to join. While legally permissible, these activities further blur the lines between his public and private roles. Some observers wonder whether Sacks – a self-made billionaire by Forbes' estimates – will declare victory and exit government service altogether. With the GENIUS Act now law, he may consider his primary mission accomplished: bringing cryptocurrency from the fringes to center stage. But that will likely take time. Sacks used a Fox News appearance yesterday to detail his immediate priorities following the act's passage, emphasizing the development of regulatory frameworks in three key areas, including defining market structure categories (securities versus commodities versus digital assets), expanding stablecoin regulations, and evaluating a potential national digital asset stockpile. Meanwhile, critics concerned about conflicts of interest argue the precedent has been set. The rapid passage of crypto-friendly legislation, combined with ongoing investments in AI companies serving the federal government, suggests that Sacks and others with similar arrangements have positioned themselves and their wider orbit to benefit from their government access. Whether this represents a new normal for Silicon Valley relations with Washington, or instead an aberration that future administrations will reverse, remains to be seen. What's clear is that traditional ethics frameworks may be inadequate for an era when venture capitalists can maintain their investment activities while simultaneously shaping the policies that determine those investments' future value. For now, the arrangement continues, protected by carefully crafted waivers that ethics experts have questioned but find legally unassailable. As Clark puts it: 'No one will be able to prosecute him.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
TechCrunch
19-07-2025
- Business
- TechCrunch
David Sacks and the blurred lines of government service
When Vultron announced its $22 million funding round earlier this week, the AI startup made sure to highlight a key investor: Craft Ventures, the firm 'co-founded by White House AI adviser David Sacks.' The announcement has raised questions about conflicts of interest in the Trump administration, where Sacks serves as both AI and crypto czar while maintaining his role at Craft Ventures — an arrangement that critics see as a new model of government service where the lines between public duty and private gain have become unclear. Sacks has secured not one but two ethics waivers allowing him to shape federal policy while maintaining financial stakes in the very industries he oversees. The first, an 11-page document from March, covers his crypto investments. The second, issued in June, specifically addresses his AI holdings. Together, they've enabled what ethics experts call an unprecedented arrangement. 'This is graft,' said Kathleen Clark, a Washington University law professor specializing in government ethics, after reviewing Sacks' crypto waiver. 'This is a lawyer in the White House Counsel's office doing Trump's bidding, letting [Sacks] make money while insulating him from criminal liability.' Clark's analysis is critical. She notes the waiver discusses percentages of Sacks' total assets – when it was signed, his stake in Craft's overall portfolio represented less than 3.8% of his total assets, for example – but never reveals actual dollar amounts. 'The fact that this interest is just 3.8% of someone's total assets, that's something if you're talking about a law professor. But 3.8% of this guy's assets is a heck of a lot of money,' Clark said. Clark also argues that the waiver fails to consider any consideration of potential upside. Federal regulations require examining not just current value but 'potential profit or loss.' For a venture capitalist like Sacks, Clark notes, 'even if right now [if his shares are] less than 3.8% of his assets, if it does well, it could be more than that.' Craft Ventures did not respond to several requests from TechCrunch this week to discuss this story. Techcrunch event Tech and VC heavyweights join the Disrupt 2025 agenda Netflix, ElevenLabs, Wayve, Sequoia Capital — just a few of the heavy hitters joining the Disrupt 2025 agenda. They're here to deliver the insights that fuel startup growth and sharpen your edge. Don't miss the 20th anniversary of TechCrunch Disrupt, and a chance to learn from the top voices in tech — grab your ticket now and save up to $675 before prices rise. Tech and VC heavyweights join the Disrupt 2025 agenda Netflix, ElevenLabs, Wayve, Sequoia Capital — just a few of the heavy hitters joining the Disrupt 2025 agenda. They're here to deliver the insights that fuel startup growth and sharpen your edge. Don't miss the 20th anniversary of TechCrunch Disrupt, and a chance to learn from the top voices in tech — grab your ticket now and save up to $675 before prices rise. San Francisco | REGISTER NOW The Vultron investment The timing of Vultron's announcement illustrates the complexity. Vultron creates AI tools specifically for federal contractors, helping them win government contracts more efficiently. The company boasts of reducing proposal timelines 'from weeks to days' and claims one Fortune 500 client now saves 'more than 20 hours per user each week' on federal contracting work. A source close to the company says Craft Ventures' investment predates Sacks' government appointment. However, the timing raises questions: the nation's AI czar has a financial stake in a company that profits from helping businesses win the very federal contracts his policies will influence. Senator Elizabeth Warren has been among the most vocal critics of these arrangements. In a May letter to the Office of Government Ethics, the ranking member of the Senate Banking Committee questioned Sacks' crypto waiver, noting he was simultaneously 'co-hosting a $1.5 million-a-head dinner for crypto industry players' while shaping federal crypto policy. 'Mr. Sacks simultaneously leads a firm invested in crypto while guiding the nation's crypto policy,' Warren wrote. 'Normally, federal law would prohibit such an explicit conflict of interest.' Sacks has largely dismissed Warren's concerns, accusing her of having a 'pathological hatred for the crypto community.' He has separately said that he sold a fortune in crypto before joining the White House 'because I didn't want to even have the appearance of a conflict.' Indeed, supporters of Sacks point to the sacrifices he's made for government service. According to his waivers, he and Craft Ventures have divested over $200 million in digital assets, with at least $85 million directly attributable to him. He has sold stakes in fast-growing companies, including his position in Elon Musk's xAI, and initiated the sale of interests in approximately 90 venture capital funds, including Sequoia funds. The source close to Sacks emphasizes these divestments, noting that because of his government role, Craft Ventures must now run every AI and crypto-related deal past the White House ethics committee. This oversight, they suggest, makes it implausible to invest in feeder funds and smaller deals, given the volume of work that might entail for everyone involved. Clark argues that the underlying ethical framework remains flawed. The waivers themselves, she argues, are designed to provide legal cover rather than address ethical concerns. 'This is whitewashing,' she said. Complicating matters further, Sacks works as a government employee just 130 days per year – effectively every other week – while maintaining his commercial activities during off periods. In September, for example, Sacks and his co-hosts in their popular podcast, All In, will stage what has become an annual three-day conference to which attendees pay $7,500 per person to join. While legally permissible, these activities further blur the lines between his public and private roles. Some observers wonder whether Sacks – a self-made billionaire by Forbes' estimates – will declare victory and exit government service altogether. With the GENIUS Act now law, he may consider his primary mission accomplished: bringing cryptocurrency from the fringes to center stage. But that will likely take time. Sacks used a Fox News appearance yesterday to detail his immediate priorities following the act's passage, emphasizing the development of regulatory frameworks in three key areas, including defining market structure categories (securities versus commodities versus digital assets), expanding stablecoin regulations, and evaluating a potential national digital asset stockpile. Meanwhile, critics concerned about conflicts of interest argue the precedent has been set. The rapid passage of crypto-friendly legislation, combined with ongoing investments in AI companies serving the federal government, suggests that Sacks and others with similar arrangements have positioned themselves and their wider orbit to benefit from their government access. Whether this represents a new normal for Silicon Valley relations with Washington, or instead an aberration that future administrations will reverse, remains to be seen. What's clear is that traditional ethics frameworks may be inadequate for an era when venture capitalists can maintain their investment activities while simultaneously shaping the policies that determine those investments' future value. For now, the arrangement continues, protected by carefully crafted waivers that ethics experts have questioned but find legally unassailable. As Clark puts it: 'No one will be able to prosecute him.'
Forbes
09-07-2025
- Business
- Forbes
'Seed-Strapped' AI Startups Are Refusing Millions— To Make Billions
Investors Chasing AI startups Valuation, headcount, and total capital raised are the traditional markers of startup success. But what if that conventional wisdom is actually a relic of the SaaS era? AI startups that have asked that same question are now turning to a new, 'seed-strapping' funding strategy to become profitable, keep their stake in the company, and avoid the notorious dilution treadmill of venture capital. A story of a particular AI CEO, Pukar C. Halal of Craft Ventures-backed SecurityPal is what put this trend on my radar. And I'm seeing a pattern emerging in entrepreneurship that's worth exploring: in 2025, you can scale to profitability while incurring far fewer sunk costs, and this means entrepreneurs can retain ever-larger shares of their own companies—often to the disdain of their early of climbing the 'Series A-to-IPO' ladder, this new cohort of AI founders is raising one seed round—if any—sprinting to profitability, and basically skipping the traditional follow-on rounds venture capitalists depend on for valuation mark-ups and expanded founders, a self-funding, cash-flow-positive company is the dream—more control, more equity, and the ability to fundraise on their own terms, if they so choose. But for many traditional venture investors, this is dead money with no new valuation mark-ups. As this seed-strapping trend gains momentum, AI startups may be the clearest indication yet that the old, growth-at-all-costs model is broken, and the balance of power may be shifting towards entrepreneurs. Venture Math Has Flipped Right now, venture capitalists are sitting on record amounts of unused capital, known as "dry powder," which has reached nearly $500 billion as of mid-2025. Yet IPO markets are just starting to thaw, while billion-dollar acquisitions—which were commonplace through 2021—have been scarce ever since rising interest rates and market uncertainty slowed deals in 2022. Without these exits, VCs can't return profits to their own investors and must rely on paper mark-ups—increased valuations from later funding rounds—to show results in higher competition for fewer attractive deals. It also drives up entry prices, slows returns, and makes it harder for VC firms to raise future funds. But for seed-strappers, their strong financial position gives them the leverage to set deal terms in their VCs vying for a shrinking pool of standout opportunities, founders can choose the most founder-friendly investors and auction scarce equity to the highest bid term sheet. This creates higher valuations, minimizes dilutions, and allows the company to set protective provisions in place that preserve equity and control. And, with no public-market deadline looming, founders can focus on building durable cash flow instead of chasing vanity metrics for Wall is this supply-demand mismatch clearer than in AI, where falling compute costs and open-source models let teams reach profitability on a shoestring. Why AI Economics Have Changed It's never been cheaper to build a profitable AI business. Cloud computing costs, particularly GPU prices essential for AI training, have been plummeting. At the same time, powerful open-source AI models like Meta's Llama have drastically lowered entry barriers, allowing lean, disciplined teams to deliver market-ready products increased efficiency means many AI companies can now achieve meaningful revenue well before even reaching what used to be considered Series A territory. This fundamentally changes venture economics. Lower costs and faster paths to profitability grant entrepreneurs unprecedented leverage, allowing them to dictate deal terms on their own timelines—or reject outside funding altogether. A New Cohort of AI Entrepreneurs Here are a few companies that have embraced seed-strapping and found skyrocketing success along the way:After raising $21 million Series A from Craft Ventures, SecurityPal AI built a hybrid AI platform that pairs LLM agents with a team of 300 forward deploy analysts at its 24/7 RLFH command center in Kathmandu, aka 'Silicon Peaks.' Think Surge AI but for the fast-growing Security Assurance market at the intersection of GRC, cybersecurity, and revenue. What once took weeks now takes hours with SecurityPal. The company quickly became profitable, landing six- and seven-figure deals with Fortune 500s and top tech names including OpenAI, Grammarly, Airtable, and then, the founder hasn't raised another dollar despite, according to inside sources, fielding interest from over 100 firms. In an email from Pukar C. Hamal, SecurityPal AI's CEO, to somebody inquiring about investing, Hamal replied,'we're already profitable, and we're taking customers away from the Big Four every week. My focus is on scaling revenue right now, not growing headcount with venture capital or increasing our paper valuation.'SecurityPal AI's last valuation was $105 million, but, it appears Hamal shares the sentiment of quite a few AI founders these days: the only metric that matters is could not be reached for comment on this AI, a bootstrapped data-labeling powerhouse, took seed-strapping one step further by skipping outside funding entirely. While heavily-funded rivals like Scale AI raised hundreds of millions in an effort to scale quickly, Surge AI grew organically and is now generating over $1 billion annually. Their platform tackles the bottleneck of quality, human-labeled data for LLM training, leveraging a global crowd-workforce platform to deliver premium RLHF datasets to customers such as Anthropic and a company that bolts AI-powered edge modules onto factory equipment, bootstrapped itself to $80 million in annual revenue before accepting a single outside investment. When Bright AI's founders did raise a meager $15 million, it wasn't because they needed to. It was optional R&D money to test new form factors while keeping full control of the business. They kept all of their board seats and routinely turn down nine-figure term sheets from growth startups like these are leading the charge when it comes to rejecting the blitzscale model and shifting power back to entrepreneurs. However, investors don't share the same enthusiasm. Why Investors Are Annoyed—And Founders Don't Mind Investors accustomed to frequent fundraising rounds and rapidly increasing valuations find seed-strappers frustrating because it chips away at the industry's core sales pitch: raise aggressively and then raise again. Without further fundraising, investors can't increase valuations on paper, nor can they easily exit their investments. For venture firms whose performance metrics depend heavily on these mark-ups, seed-strappers represent a wrench in the traditional venture machine, and investors are taking losses as a founders don't seem troubled by their investors' impatience. This is likely due to the fact that reducing their reliance on venture capital means founders now have the freedom to focus on scaling their company, rather than chasing fundraising cycles. Staying lean allows them to control their destiny and maintain ownership and strategic flexibility without external pressure and unnecessary oversight. What This Means for Entrepreneurs and InvestorsFor aspiring entrepreneurs, seed-strapping represents a path of greater autonomy, lower risk, and a higher financial upside. It challenges the assumption that startups must continuously raise capital to succeed. Instead, founders can leverage capital-efficient technologies to organically build profitable businesses early on, thereby maintaining control and maximizing personal equity. In this new playbook, customer revenue is becoming the cheapest form of investors and those interested in venture finance, seed-strapping raises fundamental questions about the venture capital model itself. As the IPO window narrows and M&A appetites become more selective, funds can no longer rely on follow-on rounds for paper mark-ups or quick exits. Instead, the game is shifting towards underwriting genuine cash-flow durability to an 'earn more, own more' model that favors profitability over investors, entrepreneurs, and observers grapple with the shifting landscape, one thing is clear: this is a return to financial fundamentals, signaling a future where profitability is the hallmark of a successful startup.
Yahoo
24-06-2025
- Business
- Yahoo
The All-In Podcast's $1,200 tequila has already sold out
The VCs, pod bros, and self-proclaimed 'besties' of the All-In Podcast launched their own tequila brand Saturday night and it promptly sold out, according to liquor ecommerce sites. Their version of the Mexican spirit cost a jaw-dropping $1,200 apiece but only 750 bottles were made. The stacked poker-chip container was inspired by the 'besties' love of the card game. The All-In Podcast is one of the most popular shows by venture investors who have turned to politics. The besties consist of Launch founder Jason Calacanis, Craft Ventures founder David Sacks, who is a member of the Trump administration as AI Czar, David Friedberg, who founded and is CEO of The Production Board, and so-called SPAC king Chamath Palihapitiya of Social Capital. The photos from the evening's launch gala, which was held June 21 at swanky LA restaurant Delilah, give off a 1960s-era Rat Pack vibe. VC Brianne Kimmel was apparently in attendance at the party flanked by LA's who's-who in tech. She described it on X as 'Fun night, everyone looked great, SPAC jokes were made.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
