Latest news with #SunValley
WIRED
2 days ago
- Business
- WIRED
OpenAI Seeks Additional Capital From Investors as Part of Its $40 Billion Round
Jul 22, 2025 2:23 PM OpenAI, which recently announced a $40 billion round of financing, is seeking funding from new and existing investors to fulfill the deal. CEO of OpenAI Sam Altman speaks to members of the media as he arrives at the Sun Valley lodge for the Allen & Company Conference on July 8, 2025. Photograph:OpenAI is seeking capital from new and existing investors, two people familiar with the company's plans tell WIRED. The fundraising effort is part of a $40 billion round announced in March. The round will reopen on Monday, July 28, according to one of the sources, who has direct knowledge of the fundraising effort. The $40 billion round announced earlier this year brought OpenAI's valuation up to $300 billion, making it one of the most highly valued private startups in history. The round was led by Japanese investment conglomerate SoftBank, which committed to contributing 75 percent of the total funding. The initial tranche was $10 billion, with $7.5 billion from SoftBank and another $2.5 billion from a syndicate of other investors. OpenAI is currently raising the final $30 billion, with $22.5 from SoftBank and $7.5 from a syndicate of other investors. SoftBank's commitment could be slashed to $10 billion if OpenAI does not restructure by the end of the year, WIRED confirmed. OpenAI declined to comment on the record. OpenAI has raised a total of $63.92 billion since the company was founded in 2015, according to PitchBook. Its backers include a wide range of institutional and individual investors, including Microsoft, Andreessen Horowitz, Sequoia Capital, Founders Fund, Thrive Capital, Coatue Management, Nvidia, and Reid Hoffman. Microsoft and OpenAI's relationship is closely intertwined, with Microsoft providing OpenAI with massive amounts of cloud computing resources and OpenAI giving Microsoft exclusive access to its best models—though it was recently reported that their relationship has complications. OpenAI has also partnered with SoftBank, among others, on a four-year AI data center project in which upwards of $500 billion is projected to be invested. The Wall Street Journal reported earlier this week that the two entities have been at odds over certain aspects of the partnership, including where to build the data centers, and that OpenAI CEO Sam Altman has been making moves to sign deals for Stargate-aligned data centers without the Japanese firm. SoftBank declined to comment on the record. OpenAI's company structure has also been a point of contention, and has rankled Elon Musk, who helped launch the research lab with a mission to safeguard humanity against artificial general intelligence, or AGI. After Musk left the company's board in early 2018,OpenAI created a for-profit arm, in part to make it easier to fundraise. Last year Musk sued OpenAI for allegedly abandoning its original mission and said the company is 'not just developing but is refining an AGI [Artificial General Intelligence] to maximize profits for Microsoft, rather than for the benefit of humanity.' In May, OpenAI proposed a new structure that keeps the non-profit in control of the company, and turns its current for-profit subsidiary into a public benefit corporation. This new non-profit would hold shares in the PBC, and the PBC would in theory be designed to prioritize returns for shareholders while also pursuing projects with clear public benefits. SoftBank's investment in OpenAI is contingent on this new structure being approved by attorneys general in California and in Delaware by early next year. Additional reporting by Kylie Robison and Zoë Schiffer.
Business Insider
2 days ago
- Politics
- Business Insider
The metamorphosis of Shaun Maguire
Shaun Maguire wanted New York City voters to know about the dangers ahead. On July 4, the general partner at the industry-leading Sequoia Capital posted on X that Democratic mayoral candidate Zohran Mamdani was a secret "Islamist" who "comes from a culture of lying." Mamdani, he added, "has basically advocated for the destruction of America." The comments were not unusual for Maguire, a self-described moderate former Hillary Clinton voter who has become a full-throated MAGA convert, defender of Israel, and one of the most provocative right-wing political commentators among an increasingly right-leaning group of venture capitalists and founders. This time, though, the social-media dam broke, bringing a flood of critical comments from startup founders and tech workers. Hundreds of Muslim founders signed an open letter asking that Sequoia apologize and discipline Maguire. At the Allen & Co. Sun Valley conference, the annual " summer camp for billionaires" in Idaho, Sequoia's managing partner Roelof Botha was hounded with questions about Maguire, The New York Times reported. Several other people I spoke to — including Maguire's friends, colleagues, and executives from a Sequoia limited partner and a Sequoia portfolio company — wondered what might happen to tech's new leading controversialist. More broadly, the ongoing fury over Maguire's posts reflects a tech industry riven by subterranean faultlines over Israel and whether venture capitalists should be funding companies involved in what a UN Special Committee and several other international organizations have deemed a genocide in Gaza. Those disagreements, which have been tamped down by some Muslim tech workers' fear of losing their jobs or funding, are now exploding into the open. Osman "Ozzie" Osman, the founder of financial planning app Monarch Money, wrote on X that Sequoia Capital was "OK with racism and Islamophobia." "It just feels asymmetric," Osman wrote to me in a message. "People who feel unhappy about the devastation in Gaza are scared to speak up," he said. "Meanwhile, someone like Shaun can repeatedly make bigoted statements like this one with no ramifications." He added, "I'm just surprised Sequoia tolerates these sorts of statements." Powerful industry figures like Elon Musk, Joe Lonsdale, and Keith Rabois, meanwhile, came to Maguire's defense. "Shaun Maguire is brave," wrote Josh Wolfe, a cofounder of Luxe Capital. Hundreds of technologists signed an open letter of support that called Maguire a "principled thinker and a partner to countless founders who span geographies, faiths, and political beliefs." Maguire, who has taunted his critics and journalists on X, forwarded a request for an interview to Sequoia's communications team, which did not respond to requests for comment. "I don't think it's harmed his deal flow," a venture capitalist who's worked with Maguire told me. "In many cases it's probably been helpful, especially in this whole category of American resilience tech." And Maguire keeps posting. Two days after he called Mamdani an Islamist, he shared a 28-minute video to X in which he apologized to any Muslims who were offended, and then proceeded to lay out a case for why he was right. "I think Zohran Mamdani is a wolf in sheep's clothing," he said. He explained that he had done a huge amount of research on Islamism and the Iranian revolution, visited mosques in 30 countries, and fasted for Ramadan. He said that he was kidnapped by a Muslim man in Hyderabad, India. "I have gone to extreme lengths to understand this conflict," Maguire said. "I don't think it's harmed his deal flow. In many cases it's probably been helpful, especially in this whole category of American resilience tech." For Maguire, who worked on a DARPA (Defense Advance Research Projects Agency) program as a civilian contractor in Afghanistan, the conflict is between radical Islam and the West — a rhetorical throwback to the Bush-era war on terror, this time with tech startups churning out drones and surveillance systems. "I am personally very worried about what's happening in the West," he said in the video. "I really do believe that we have pretty major sleeper cell infiltration." Taking the viewer through a series of tabs in his web browser, Maguire dove into the background of Mahmood Mamdani, Zohran's father, a professor of anthropology at Columbia University. Maguire unspooled a string of epithets — not all of them negative — to describe the relatively obscure academic: He was a member of an "ideological sleeper cell," "a mastermind," "a genius," and "one of the architects of the anti-Israel movement in America." Maguire seemed to think that his son, the Democratic mayoral nominee, was at best an unwitting accomplice to the sort of political Islam that swept through Iran in the 1979 revolution. Maguire's wife's family, who is Jewish, fled revolutionary Iran. He closed by asking for advice. "If someone has a suggestion about how to criticize Islamists and call out the risk and danger of Islamism in the West without lumping in Muslims more broadly, I would really like the feedback." On X, the video was received with more condemnation from a growing chorus of critics and cheers from pro-MAGA tech accounts. "Never back down," he wrote to one booster. Maguire, who is 39, has described himself as growing up fascinated by computers but indifferent to schoos. He found his academic stride at the University of Southern California and Stanford, before enrolling in a Ph.D. program at Caltech, where he studied quantum physics, participated in student government, and explored startup ideas with peers. Friends from the time recall him as "pragmatic," with a sense of quantitative rigor, interested in where the facts would take him. He did not come across as very political — a centrist, perhaps. He was a good communicator, able to explain scientific and technical concepts to a lay audience, and he was driven. Maguire lived about 30 miles from the Caltech campus, and once in a while he would commute on foot, running the distance, a former colleague recalled. Maguire finished 22nd in the 2011 Marine Corps marathon, and he ran another marathon in the sweltering heat at Burning Man. In 2011, Maguire put his Ph.D. on hold to become a civilian employee for DARPA in Afghanistan. He was recruited, he told an interviewer for a Caltech history project, by DARPA's director Regina Dugan, a Caltech alumnus. As part of DARPA's Memex program, an initiative to collect and make search tools for data beyond the surface web, Maguire's group mapped internet-connected devices to form a picture of what was connected to a military network and what was but shouldn't be. Maguire has spoken proudly about his work in Afghanistan, posting pictures of himself riding in a military helicopter and telling Blackwater founder Erik Prince on X that he trained at one of his facilities. In a 45-minute video he released in response to a New York Times article last week, Maguire said that he was once woken up by the pressure wave from a deadly suicide bombing. He said that he was "one of about 50 people" who was getting "real-time translations" from the library of intelligence Seal Team 6 gathered from raiding Bin Laden's compound. "At no point did I ever hear anything like this back then," said someone who knew him in Afghanistan when told about Maguire's comments on Mamdani. This person asked not to be named, citing their ongoing relationship. "He seemed like a very reasonable, empathetic, competent scientist who embraced travel and being in foreign cultures." The former colleague described Maguire as having a sense of mission and being concerned about national security issues without seeming ideological. Afghanistan was another stop on the backpacker's adventure. Eventually, Maguire and some of his DARPA colleagues, including Tim Junio, a CIA analyst-turned-CEO, spun out a startup called Qadium, which worked with government and industry clients like Goldman Sachs to secure their systems. Peter Thiel's Founders Fund was an early backer. Qadium later rebranded itself as Expanse and was sold to cybersecurity giant Palo Alto Networks for about $1 billion in 2020. A VC who worked with Maguire and Qadium described him in admiring terms. "Shaun is somebody who just knows things," the VC said, saying that Maguire had an impressive depth of technical knowledge, with a sense for where business opportunities might lie. "Shaun's a smart person who thinks several steps ahead." Maguire, now rich, returned to Caltech to finish his Ph.D. and got a job with Google Ventures, or GV. He did well there, investing in Stripe, IonQ, and OpenDoor, but he wasn't promoted to general partner. Years later, Maguire claimed that he was denied a promotion because he was a white man. He attributed the decision to Google's leadership — a product of the supposed woke excesses that have triggered a reactionary tilt in some tech elites, from Musk on down. (A Google spokesperson told the New York Post at the time that Maguire's account was "completely untrue.") Maguire was prompted to share the story on X in 2024 after Google's Gemini AI generated images of America's founding fathers as black men. In 2019, Maguire jumped ship for tech's most storied VC firm, Sequoia Capital, with a recommendation from Stripe cofounder Patrick Collison. (After I posted on X that I was writing about Maguire, Collison sent me a direct message asking for a galley of my forthcoming book. He did not respond when I requested an interview and asked whether he helped Maguire get the Sequoia job.) "Back in 2016 I had drunk the media Kool-Aid and was scared out of my mind about Trump," Maguire wrote in a May 2024 post endorsing Trump. At Sequoia, where he has the general partner position denied to him at GV, Maguire has become known for investing in Musk's companies, including the Twitter acquisition, The Boring Company, xAI, and SpaceX. On X, Maguire and Musk are chummy, sharing each other's posts and offering supportive emojis, especially when Western civilization is at stake. In a recent video, Maguire said that his paper returns for Sequoia were approaching $10 billion. "His status at the firm is predicated on his relationship with Elon. He's an Elon guy," said a vice president at one of Sequoia's limited partners. "He's made incredible returns on SpaceX and some of the other Elon-backed companies." Paul Biggar, a tech entrepreneur and the founder of Tech for Palestine, an incubator for activist groups involved with the open letter, has sparred with Maguire. "You may not know this... but I've been watching you 👀," Maguire recently wrote on X. Biggar called the message a threat and demanded that Sequoia investigate. Biggar thinks that Maguire's connection with Musk is overrated. "Sequoia doesn't need a racist partner to talk to Elon Musk," Biggar told me. Headed by Botha, PayPal's former CFO, Sequoia has no official political alignment; prominent partners like Doug Leone and Michael Moritz have been major donors to the Republican and Democratic parties, respectively. "We're proud of the fact that we've enabled many of our partners to express their respective individual views along the way, and given them that freedom," Botha said at a conference last year. Sequoia seems to have kept a hands-off approach regarding Maguire's rising notoriety, and there may be little risk in doing so. "Given the way this progressed, and because Sequoia didn't shut this down super early, I don't think they could do anything about it at this point, even if they wanted to," said the VC who knows Maguire. "He's delivered good returns for Sequoia. Just because he has strong political views doesn't mean he's not meriting of a role as a partner there." Maguire is not alone in his views. Very much in line with a rising ethos in the VC and founder class, he holds himself out as a warrior on behalf of the American ideal, a patriot investing in the country and helping defend it from its enemies. The VC firm Andreessen Horowitz calls it American Dynamism. It's the same proudly jingoistic attitude seen in industry eminences like Palantir CEO Alex Karp and Anduril CEO Palmer Luckey. It's why Founders Fund is getting into the action-movie business. "Western Civilization is approaching the Event Horizon," Maguire recently wrote on X. "If we don't max thrust our boosters in the other direction we're not gonna make it." He wasn't always like this. People who knew him pointed to his GV experience and Hamas' attack on Israel on October 7 as milestones on his journey toward the inner circle of tech's new right-wing elite. Maguire has also written at length about his own political transformation. "Back in 2016 I had drunk the media Kool-Aid and was scared out of my mind about Trump," Maguire wrote in a May 2024 post endorsing Trump. "As such I donated to Hilary Clinton's campaign and voted for her." Maguire said that he didn't vote in 2020 and that he turned against the Biden administration after its withdrawal of US forces from Afghanistan was accompanied by deadly bombings and the collapse of the US-installed government. After October 7, Maguire thought that the Biden administration was responding with weakness, especially toward Iran. "If you start looking, it's hard to see anything other than Iranian foreign influence in the Biden administration," Maguire wrote. By now Maguire's posts often came laden with MAGA shibboleths about the corrupt legacy media, anti-Trump lawfare, and woke politics. He touted a $300,000 donation he made to a pro-Donald Trump PAC last year. After Trump's election in November, he advised the president-elect on intelligence appointments. Maguire also began talking more publicly about his Judaism — he added the last name Cohn after getting married in 2018 — and his support for Zionism. (One colleague said that he had no idea Maguire was Jewish until he arrived at his wedding in Israel.) He became a leading tech voice agitating on behalf of Israeli war aims. After October 7, Sequoia opened an office in Israel, and Maguire traveled there regularly, leading investments in cybersecurity and military firms. Maguire helped lead a $10 million seed round in Kela, a defense tech company founded by what he and his colleagues called "technowarriors" from elite Israeli military units. Kela produces sensors and AI systems that have been deployed in Gaza — its website touts that its technology is "battle tested" — and reflects the increased interest from American VCs in Israeli startups closely tied to the country's ongoing war with Hamas and its occupation of the West Bank. "We at Sequoia had independently formed a thesis around Israeli defense tech," Maguire and two colleagues wrote in an article on Sequoia's website. "In the long term, the ambition is to convert Israel into a defense tech hub for Western militaries — a source of strategic advantage for NATO and the US as they seek to deter their adversaries." This thesis sits uncomfortably for some who don't share Maguire's politics. The last two years have been "extremely painful and just demoralizing," said Hosam Arab, the Palestinian founder of fintech startup Tabby, who signed the open letter to Sequoia management. He said that the tech industry has essentially proscribed pro-Palestinian activism while broadly supporting Israel. "You see what's happening on the ground and you just don't get the support," he said, speaking about the predicament for startup founders working in the US. "And you're worried about speaking out." (Tabby, which is based in the Middle East, has received investment capital from Sequoia India, which has since become independent of Sequoia Capital.) People aren't defending just Maguire, said an executive at a Sequoia portfolio company. "They're defending the privatization of western defense." Several Muslim and South Asian tech executives I talked to worried that they could be fired for posting pro-Palestinian messages on social media. They described a culture of fear in which they believe only the most successful — founders — could speak out without experiencing major blowback. One of them was Amjad Masad, CEO of billion-dollar AI coding startup Replit, who recently talked about Gaza during an appearance on Joe Rogan's show. On X, Maguire wrote that Masad, whose father is Palestinian, had lied to Rogan's vast audience about a massacre of Palestinians at an aid site. Masad shot back that Maguire's comment was "a slanderous lie," based on a misleading screenshot. Khosla Ventures partner Keith Rabois, who has compared Masad to a Nazi, later joined the digital melee, calling Masad a Hamas supporter. Khosla Ventures is an investor in Masad's company. "If you think I'm Hamas supporter why don't you do something about it. Or are you a coward?" wrote Masad. (Masad did not respond to a request for comment.) Among its investments, Sequoia has participated in two funding rounds for nsave, which provides digital banking services to people from "distressed economies," especially in the Middle East. The company was started by two Rhodes scholars from Syria and Gaza. Nsave's Palestinian cofounder Abdullah AbuHashem didn't respond to a request for comment. While Sequoia can likely weather the media storm, Muslim tech workers, including at Sequoia portfolio companies, are beginning to organize alongside like-minded allies. "We're producing groups that advocate for Palestine in some part of the ecosystem," said Biggar, likening Tech for Palestine to a Y Combinator for activist groups. Maguire's volubility has struck some observers as out of character with a VC class that once was expected to be quantitative, measured, profit-seeking — and politically agnostic. "I genuinely thought he was a shit poster," said an executive at a Sequoia portfolio company, who learned about Maguire through his X posts. "I had no idea he was an investor until very recently. I could not believe it. I thought this had to be a podcaster of some sort." The executive, who is an Indian Hindu, said that there was a certain broad acceptance that firms like Sequoia would do business in Israel. The issue, he argued, is that a general partner at Sequoia "visibly entering the end-of-days culture wars as a pundit" indicates that Sequoia might not just be following the money. "He actually is saying out loud what is coalescing into a real capital structure." The sectors Maguire invested in — cyber, space, crypto, defense tech — are part of "this new military-industrial complex which Sequoia is very much in the middle of." People aren't defending just Maguire, the executive said. "They're defending the privatization of western defense. They are defending the privatization of global citizens data in the form of Palantir and the massive ICE budget. That's what this debate is obscuring." With more than $85 billion in assets under management, Sequoia's decisions carry great industry weight, but the firm can afford to take its time. The VP from one of Sequoia's LPs told me that while some of Sequoia's backers might disagree with the company's policies, it's hard to exert influence. As the tech industry's leading VC, Sequoia had its pick of relationships, and potential LPs were eager to give the firm its money. "The Sequoia relationship is one where they have all the power." Maguire continues to post daily about the supposed dangerous, secret Islamism of Zohran Mamdani — and his father. "I have been fighting Islamist radicals for well more than a decade," Maguire said in his recent 45-minute response to the Times' article. "I have seen true evil up close and personal. I have been trained in identifying evil and terrorists. With Zohran Mamdani's father, Mahmood Mamdani, the evidence is extremely clear." If anything, Maguire seems unbowed, emboldened by the attention afforded to him. "Btw this me at 1% throttle," he wrote after the 4th of July furor. "i wish i could show u the unconstrained version." Jacob Silverman is the author of "Terms of Service: Social Media and the Price of Constant Connection" and co-author of "Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud," which was a New York Times Bestseller. His next book, "Gilded Rage: Elon Musk and the Radicalization of Silicon Valley," will be published by Bloomsbury in October.
Yahoo
3 days ago
- Business
- Yahoo
Bessent: The Trump administration should look into the Fed's ‘many mistakes'
Treasury Secretary Scott Bessent said Monday he believes the Federal Reserve system should be reviewed for potentially holding back the US economy, which is 'on the cusp' of growth that could equal the dot-com boom seen in the 1990s. 'I think that's what the paradigm or the mental model for everyone should be here,' he told CNBC's 'Squawk Box' Monday morning. 'In the '90s we finally had the productivity growth kick in from the IT revolution. And I would say that we are on the cusp of that right now,' Bessent said. He said leaders in the US tech sector he met with at a recent conference in Sun Valley, Idaho, told him they believe 'the AI revolution is coming much faster than they thought, and could start kicking in as soon as the first or second quarter of 2026.' Because AI could require fewer human resources, Bessent believes this economic boom could come without reignited inflation. When asked how the country should prepare for such a boom, Bessent said: 'If the inflation numbers are low, then we should be cutting rates.' The Federal Reserve has not lowered its benchmark interest rate since December, angering President Donald Trump, who has demanded that Fed Chair Jerome Powell do so. (The central bank is an independent agency that works outside of political influence, and Powell is one member of a 12-person committee that votes on interest rates.) When asked if Trump should fire Powell, Bessent said 'I think what we need to do is examine the entire Federal Reserve institution and whether they have been successful.' 'I think that we should think, has the organization succeeded in its mission? If this were the [Federal Aviation Administration] and we were having this many mistakes, we would go back and look at why this has happened.' While Powell has said the central bank is waiting for more economic data in order to ascertain the impact of Trump's economic agenda — especially his aggressive trade policy — Bessent said there has been 'fear mongering over tariffs' and that the nation has so far seen 'very little, if any inflation.' 'All these PhDs over there, I don't know what they do. This is like universal basic income for academic economists.' The latest inflation readings show that US consumer price increases heated back up in June, rising to their highest level in four months. 'Tariffs are starting to bite,' Heather Long, chief economist at Navy Federal Credit Union, told CNN in an interview. June wholesale-level inflation was unchanged from May. Attempts to remove Powell Trump appointed Powell as Fed chair in 2018 and former President Joe Biden reappointed him in 2022. His four-year term at the helm of the Fed ends in May next year, though his tenure as governor continues until 2028. Trump has in recent weeks ramped up his distaste for Powell, calling for his 'termination' and even brandished a document last week that he said was a letter firing Powell, in a meeting with Republican lawmakers. However, Trump has stopped short of taking any overt moves to remove the Fed chair. Last week, he said it was 'highly unlikely' that he would fire Powell. Such unprecedented action would ricochet through global markets and trigger a lengthy legal challenge, as well as severe economic consequences that would backfire on Trump's desire for lower rates, economists previously told CNN. However, Bessent said last week that the Trump administration has begun the formal process of selecting Powell's replacement, months earlier than is traditional for such a decision. 'I'm not going to deal in hypotheticals,' Bessent told CNBC Monday about the Fed chief's future, adding, 'you know, Chair Powell's term ends in May. There's also another seat coming up in January. So we'll see.' (Fed governor Adriana Kugler's term ends on January 31, opening up the possibility for Trump to appoint a governor who could eventually be elevated to the role of Chair, if Powell were to resign or be removed.) Meanwhile, officials in the Trump administration are circling the wagons around a $2.5 billion renovation to the Fed's headquarters in Washington, DC, with the pretext of removing Powell 'for cause' due to the cost overruns and their claim that the Fed leader misled Congress when he spoke about the building's repairs in testimony delivered last month. Officials, including Russ Vought, director of the Office of Management and Budget, have accused Powell of presiding over a lavish overhaul of the central bank's headquarters to include Italian beehives, water features and executive elevators whisking Fed policymakers to an executive dining room. Powell on Friday sent a point-by-point letter to Vought noting that the buildings have not been updated in almost a century and require 'significant structural repairs,' in addition to asbestos abatement and 'complete replacement of antiquated systems.' Bessent said earlier this month that when he has his periodic breakfast meeting with the Fed chair, a longstanding tradition between the two officials, he prefers to eat at the central bank headquarters instead of at Treasury, noting 'the Fed's food is much better.' 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
CNN
3 days ago
- Business
- CNN
Bessent: The Trump administration should look into the Fed's ‘many mistakes'
Treasury Secretary Scott Bessent said Monday he believes the Federal Reserve system should be reviewed for potentially holding back the US economy, which is 'on the cusp' of growth that could equal the dot-com boom seen in the 1990s. 'I think that's what the paradigm or the mental model for everyone should be here,' he told CNBC's 'Squawk Box' Monday morning. 'In the '90s we finally had the productivity growth kick in from the IT revolution. And I would say that we are on the cusp of that right now,' Bessent said. He said leaders in the US tech sector he met with at a recent conference in Sun Valley, Idaho, told him they believe 'the AI revolution is coming much faster than they thought, and could start kicking in as soon as the first or second quarter of 2026.' Because AI could require fewer human resources, Bessent believes this economic boom could come without reignited inflation. When asked how the country should prepare for such a boom, Bessent said: 'If the inflation numbers are low, then we should be cutting rates.' The Federal Reserve has not lowered its benchmark interest rate since December, angering President Donald Trump, who has demanded that Fed Chair Jerome Powell do so. (The central bank is an independent agency that works outside of political influence, and Powell is one member of a 12-person committee that votes on interest rates.) When asked if Trump should fire Powell, Bessent said 'I think what we need to do is examine the entire Federal Reserve institution and whether they have been successful.' 'I think that we should think, has the organization succeeded in its mission? If this were the [Federal Aviation Administration] and we were having this many mistakes, we would go back and look at why this has happened.' While Powell has said the central bank is waiting for more economic data in order to ascertain the impact of Trump's economic agenda — especially his aggressive trade policy — Bessent said there has been 'fear mongering over tariffs' and that the nation has so far seen 'very little, if any inflation.' 'All these PhDs over there, I don't know what they do. This is like universal basic income for academic economists.' The latest inflation readings show that US consumer price increases heated back up in June, rising to their highest level in four months. 'Tariffs are starting to bite,' Heather Long, chief economist at Navy Federal Credit Union, told CNN in an interview. June wholesale-level inflation was unchanged from May. Trump appointed Powell as Fed chair in 2018 and former President Joe Biden reappointed him in 2022. His four-year term at the helm of the Fed ends in May next year, though his tenure as governor continues until 2028. Trump has in recent weeks ramped up his distaste for Powell, calling for his 'termination' and even brandished a document last week that he said was a letter firing Powell, in a meeting with Republican lawmakers. However, Trump has stopped short of taking any overt moves to remove the Fed chair. Last week, he said it was 'highly unlikely' that he would fire Powell. Such unprecedented action would ricochet through global markets and trigger a lengthy legal challenge, as well as severe economic consequences that would backfire on Trump's desire for lower rates, economists previously told CNN. However, Bessent said last week that the Trump administration has begun the formal process of selecting Powell's replacement, months earlier than is traditional for such a decision. 'I'm not going to deal in hypotheticals,' Bessent told CNBC Monday about the Fed chief's future, adding, 'you know, Chair Powell's term ends in May. There's also another seat coming up in January. So we'll see.' (Fed governor Adriana Kugler's term ends on January 31.) Meanwhile, officials in the Trump administration are circling the wagons around a $2.5 billion renovation to the Fed's headquarters in Washington, DC, with the pretext of removing Powell 'for cause' due to the cost overruns and their claim that the Fed leader misled Congress when he spoke about the building's repairs in testimony delivered last month. Officials, including Russ Vought, director of the Office of Management and Budget, have accused Powell of presiding over a lavish overhaul of the central bank's headquarters to include Italian beehives, water features and executive elevators whisking Fed policymakers to an executive dining room. Powell on Friday sent a point-by-point letter to Vought noting that the buildings have not been updated in almost a century and require 'significant structural repairs,' in addition to asbestos abatement and 'complete replacement of antiquated systems.' Bessent said earlier this month that when he has his periodic breakfast meeting with the Fed chair, a longstanding tradition between the two officials, he prefers to eat at the central bank headquarters instead of at Treasury, noting 'the Fed's food is much better.'
New York Times
5 days ago
- Business
- New York Times
Tech's Top Venture Firm Tried to Stay Above Politics. Then a Partner Created a Furor.
Roelof Botha arrived last week at the annual Allen & Company conference in Sun Valley, Idaho, to meet and mingle with tech and media moguls. A controversy brewing back home followed him to the exclusive retreat. Mr. Botha, the managing partner of Sequoia Capital, a storied Silicon Valley venture capital firm, was repeatedly asked at the event about a colleague, Shaun Maguire, two people with knowledge of the matter said. Mr. Maguire — perhaps Sequoia's most outspoken partner — had posted on X on July 4 that Zohran Mamdani, the progressive Democrat running for New York City mayor, came from a 'culture that lies about everything' and was lying to advance 'his Islamist agenda.' Mr. Maguire's post was immediately condemned across social media as Islamophobic. More than 1,000 technologists signed an open letter calling for him to be disciplined. Investors, founders and technologists have sent messages to the firm's partners about Mr. Maguire's behavior. His critics have continued pressuring Sequoia to deal with what they see as hate speech and other invective, while his supporters have said Mr. Maguire has the right to free speech. In Sun Valley, Mr. Botha listened, but remained neutral, the people with knowledge of the matter said. For half a century, Sequoia has tried to maintain that neutrality, even as rival venture capital firms such as Andreessen Horowitz and Founders Fund started taking political stances. But as Mr. Maguire has increasingly made inflammatory comments, including saying that diversity, equity and inclusion 'kills people,' Sequoia is now in a place that its leaders never wanted to be: smack in the middle of the culture wars. Want all of The Times? Subscribe.
