When President-elect Donald Trump announced on Truth Social regarding the appointment of David Sacks as the administration’s “White House AI & Crypto Czar,” it signaled more than just a staffing decision; it marked the definitive end of the uneasy détente between Silicon Valley’s accelerationist wing and the Washington regulatory establishment. Sacks, a general partner at Craft Ventures and a pivotal member of the so-called “PayPal Mafia,” is not entering the West Wing to tweak the dials of governance. According to industry insiders and reports from The Verge, he is arriving with a mandate to dismantle the Biden administration’s safety-first approach to artificial intelligence and to fundamentally rewrite the federal government’s hostile stance toward digital assets.

For years, the corridor between San Francisco and Washington has been clogged with lobbyists and safety advocates urging caution. The prevailing wisdom, enshrined in President Biden’s October 2023 Executive Order on AI, was that artificial intelligence posed existential risks requiring strict oversight, specifically regarding computing thresholds and safety testing. Sacks represents the antithesis of this view. His appointment suggests that the incoming administration views regulation not as a safety net, but as a shackle on American innovation in a zero-sum geopolitical contest with China.

The dismantling of the ‘Safety’ Regime

The centerpiece of Sacks’ likely agenda is the repeal of the Biden AI Executive Order. As detailed by The Verge, Sacks has been a vocal proponent of a contrasting framework often referred to as the “Make America Number One in AI” order. This proposed directive, championed by the America First Policy Institute, argues that the current regulatory landscape is a form of “regulatory capture” designed to entrench the dominance of incumbent tech giants like Google and Microsoft/OpenAI while locking out open-source competitors and smaller startups.

The philosophical shift cannot be overstated. Under the previous regime, the White House Office of Science and Technology Policy focused heavily on algorithmic bias, labor displacement, and the theoretical risks of artificial general intelligence (AGI). In contrast, Sacks has used his platform on the “All-In” podcast and X to argue that “AI safety” is often a Trojan horse for censorship and centralization. His approach, which aligns closely with the “e/acc” (effective accelerationism) movement, prioritizes massive energy expansion for data centers and the protection of open-source model weights over safety audits.

Championing ‘Little Tech’ Against the Giants

A recurring theme in Sacks’ public commentary is the defense of “Little Tech.” While the general public often views Silicon Valley as a monolith, deep fissures exist between the trillion-dollar incumbents and the venture-capital-backed startup ecosystem. The New York Times has noted that Sacks’ fundraising efforts for the Trump campaign were predicated on the idea that the Biden administration’s antitrust and regulatory policies were stifling the next generation of founders. By appointing Sacks, the administration is signaling a pivot toward a laissez-faire environment where the primary government role is to remove barriers rather than erect guardrails.

This perspective posits that burdensome compliance costs for AI models—such as the reporting requirements for models trained on more than 10^26 floating-point operations—serve only to protect companies that can afford armies of compliance lawyers. Sacks is expected to push for a regulatory vacuum that allows open-source models, such as Meta’s Llama series or Mistral, to flourish without federal interference. This stance puts the new “Czar” on a collision course with safety institutes and “AI Doomers” who fear that unregulated open-source AI could lower the barrier to entry for bio-weapons creation or massive cyberattacks.

The Crypto Counter-Revolution

While AI dominates the headlines, Sacks’ remit explicitly includes cryptocurrency, a sector that views the outgoing SEC administration under Gary Gensler as an existential threat. Sacks has been a relentless critic of what the industry terms “Operation Choke Point 2.0”—the alleged coordinated effort by regulators to cut crypto firms off from the traditional banking system. His appointment is widely interpreted by the markets as a guarantee that the SEC’s “regulation by enforcement” strategy will end immediately upon the inauguration.

Industry analysts speaking to Bloomberg suggest that Sacks will likely steer the administration toward a legislative framework that clarifies the distinction between securities and commodities, potentially favoring the Commodity Futures Trading Commission (CFTC) as the primary regulator for digital assets. For venture capitalists holding heavy bags of Solana and other altcoins—assets Sacks himself has supported—this represents a potential windfall. The goal is to repatriate crypto innovation, encouraging firms that fled to Dubai or Singapore to return to American soil under a friendly regulatory umbrella.

The PayPal Mafia’s Washington Takeover

The ascendancy of David Sacks cannot be viewed in isolation; it is the culmination of the “PayPal Mafia’s” long march through the institutions. With Elon Musk leading the Department of Government Efficiency (DOGE) and Peter Thiel’s protégé JD Vance in the Vice Presidency, Sacks completes a triumvirate of tech libertarians who believe the American administrative state is broken and requires radical disruption. This network operates on a shared worldview: that technological stagnation is the root of economic decline and that the government’s role is to facilitate the boldest possible engineering feats.

This network effect provides Sacks with unique leverage. Unlike a traditional bureaucrat, he has a direct line to the President and the ear of the world’s wealthiest man. However, this insularity also raises questions about conflicts of interest. As The Washington Post has highlighted, Sacks retains significant investments in AI and crypto startups through Craft Ventures. While he is expected to divest or recuse himself from specific decisions, his broad policy strokes will inevitably benefit the portfolio classes he has spent the last decade building.

Geopolitics and the Compute War

The “Make America Number One in AI” strategy is intrinsically linked to national security. Sacks and his cohorts frame the AI race not as a domestic safety issue, but as a cold war with China. The Verge reports that the draft executive orders circulating in these circles emphasize the need for “energy dominance” to fuel AI data centers. This implies a holistic policy shift that integrates energy deregulation—specifically regarding nuclear and natural gas—with tech policy. The argument is simple: if the U.S. slows down AI development for safety reasons, China will leapfrog American capabilities, rendering the safety debate moot.

This geopolitical framing allows Sacks to bypass traditional bipartisan concerns about AI risks. By wrapping deregulation in the flag, the new administration can characterize safety regulations as threats to national sovereignty. This narrative is likely to resonate with defense hawks in Congress, potentially creating a legislative fast lane for infrastructure projects required to support massive AI clusters, bypassing environmental reviews that typically delay such construction.

The Fate of the Safety Institutes

One of the most immediate casualties of Sacks’ tenure may be the U.S. AI Safety Institute (AISI), a body established under the Biden administration to operationalize safety testing. While the AISI has garnered international cooperation, including agreements with the UK, its future is tenuous. Insiders speculate that Sacks may seek to defund or repurpose the institute, shifting its focus from “pre-deployment testing” (which can delay product launches) to “post-deployment monitoring.”

This move would be celebrated by the open-source community on X, who have long argued that the AISI was poised to become a gatekeeper that would only certify models from well-connected giants. However, academic researchers and ethicists warn that dismantling this infrastructure leaves the U.S. blind to the very real risks of algorithmic amplification of disinformation and autonomous cyber-capabilities. Sacks is betting that the market will solve for safety—that unsafe models will simply fail to gain adoption—a libertarian hypothesis that is about to be tested on a national scale.

A New Framework for Free Speech in Code

Underlying Sacks’ technical and economic policies is a fierce ideological commitment to free speech. He has frequently criticized the “woke mind virus” he perceives in current AI models, such as Google’s Gemini, which faced backlash for historically inaccurate image generation. Sacks views AI bias not as a problem of discrimination against marginalized groups, but as a problem of engineered political correctness that distorts reality. His policy guidance is expected to discourage federal agencies from pressuring AI companies to moderate content, treating code and model outputs as protected speech.

This creates a complex legal landscape. If the federal government retreats from pressuring platforms on moderation, it sets up a conflict with European regulators. The EU AI Act imposes strict governance requirements that clash directly with Sacks’ deregulation ethos. Global tech companies may find themselves navigating a fractured world: a “Wild West” American market optimized for speed and maximizing compute, and a highly regulated European market focused on compliance and safety.

The Investor Class as Policy Makers

Ultimately, David Sacks’ appointment cements a new reality in Washington: the investor class is no longer just funding the lobbyists; they are writing the laws. This represents a profound shift from the lawyer-heavy administrations of the past. The “move fast and break things” ethos of early Facebook is being adapted into “move fast and fix the government.” Whether this approach will unleash a new golden age of American technology or lead to systemic instability remains the trillion-dollar question. But for now, the message to the industry is clear: the brakes are off, and the Czar of acceleration is behind the wheel.