The debate over artificial intelligence has reached what venture capitalists are calling “a new level of retardation.” In a recent episode of the All-In Podcast, discussions arose on how prominent tech investors push back against what they describe as a coordinated effort to derail AI development in the United States.
The latest flashpoint came when Senator Bernie Sanders proposed a moratorium on new AI data centers, arguing that billionaires are pushing AI for profit while ignoring massive unemployment concerns. His proposal has been widely criticized by Silicon Valley leaders who warn that such restrictions would hand technological leadership to China.
David Sacks, who serves in the Trump administration, framed the issue bluntly: “Bernie can’t stop the progress. He can’t stop China from making progress. We can stop progress in the US, but it’s not going to stop China from advancing these technologies. This would be the biggest own goal ever if we took our leadership in the AI race and just handed it to China.”
Recent reporting has revealed that much of the negative AI coverage in major media outlets has been funded by what critics call the “doomer industrial complex.” According to a Semaphore article, AI critics have funded journalism fellowships at NBC News, Bloomberg, Time, The Verge, and the LA Times through the Future of Life Institute, a group that believes AI will become sentient and replace humans.
The funding came from an unusual source. Ethereum founder Vitalik Buterin donated various dog-themed cryptocurrencies to Future of Life, which eventually became worth $600 million. “By this almost accident, this Doomer think tank ends up with a $600 million war chest and they’ve been funding these journalism fellowships,” Sacks explained.
The same groups have been funding academic studies on AI and supporting NIMBY organizations opposing data centers, all with the explicit goal of stopping AI development entirely.
One of the most persistent narratives is that AI is causing massive job displacement. However, recent studies contradict this claim. A new Vanguard report analyzing job growth and wage growth in occupations highly exposed to AI automation found that both metrics are actually higher in AI-exposed jobs.
Job growth in occupations exposed to AI measured 1.7% compared to 0.8% for other occupations. Wage growth showed an even starker difference: 3.8% versus 0.7% for other occupations.
“As you make workers more productive, the value of their labor increases, not decreases, and they end up getting paid more,” Sacks said. This follows a Yale Budget Lab study showing no discernible disruption to the job market in the 33 months after ChatGPT’s launch.
Despite positive data, tech leaders acknowledge they face a significant perception challenge. Chamath Palihapitiya drew parallels to the Gilded Age industrialists who faced similar public skepticism.
“We have a handful of companies. All the PR that you see from those handful of companies is a bunch of circular deal making,” Palihapitiya said. “At the tail end of it, it’s accompanied by a completely different set of articles that everybody also reads about the sort of damocles that’s about to fall on their head.”
He argued the industry needs to follow the example of Andrew Carnegie, John D. Rockefeller, and Henry Ford, who used their wealth to build libraries, fund universities, and raise wages. “We need to self organize better and we need to be more on the forward foot. We need to start doing things that are practically measurable by tens of millions of American citizens.”
Several specific claims about AI’s negative impacts have been debunked. Water usage concerns, which have been widely reported, turn out to be exaggerated. AI data centers use significantly less water than golf courses or almond farming in California.
Electricity concerns are being addressed through proposals to let AI companies build their own power generation rather than connecting to the grid, as President Trump has advocated.
The environmental claims appear to be part of a broader strategy. “AI is the new lightning rod for fear and divisiveness that ultimately breeds compliance and control,” said David Friedberg. “That fear mongering is a very similar tactic that we’ve seen in prior generations where policies were misstated, fear was used, and then voting control allowed folks to come to power that were looking for power.”
While beating China in the AI race may not resonate with average Americans struggling with grocery prices and job concerns, tech leaders argue the stakes are existential. China is investing $48 billion through its National Integrated Circuit Industry Investment Fund to develop independent lithography technology that could eliminate America’s semiconductor advantage.
Recent reports suggest China has built a prototype of ASML’s extreme ultraviolet lithography machine, potentially accelerating their timeline to chip manufacturing parity from decades to just a few years.
“The war with China is existential because if we can keep it on the battlefield of AI and intellectual and economic prowess, we have a very good chance of winning,” Palihapitiya said. “If it devolves and all of a sudden becomes a different kind of battle, that’s bad for everybody.”
The venture capitalists argue that stopping AI development won’t protect American workers. It will simply ensure that the technology develops elsewhere, leaving Americans without the economic benefits while still facing any disruptions.