The PayPal mafia is at war again, and this time it's over AI policy. OpenAI investor Reid Hoffman just jumped into a public spat with White House AI czar David Sacks, defending Anthropic as "one of the good guys" after Sacks accused the AI startup of regulatory fear-mongering. The clash exposes deep fractures in Silicon Valley over how aggressively to regulate artificial intelligence.
The tech world's most influential alumni network just became a battleground. Reid Hoffman and David Sacks, two titans from the legendary PayPal mafia, are trading barbs over AI regulation in what's become the most public Silicon Valley political fight since the election.
Hoffman fired the latest shot Monday, calling Anthropic "one of the good guys" after Sacks, now serving as President Trump's AI and crypto czar, went after the AI startup last week. "Anthropic, along with some others (incl Microsoft, Google, and OpenAI) are trying to deploy AI the right way, thoughtfully, safely, and enormously beneficial for society," Hoffman wrote on X, according to CNBC reporting.
The clash started when Anthropic co-founder Jack Clark published an essay called "Technological Optimism and Appropriate Fear" that advocated for careful AI development. Sacks pounced, accusing the company of "running a sophisticated regulatory capture strategy based on fear-mongering" and being "principally responsible for the state regulatory frenzy that is damaging the startup ecosystem."
But this isn't just about AI policy - it's personal. Hoffman and Sacks both joined PayPal in 1999 and helped build what became known as the PayPal mafia alongside Peter Thiel, Elon Musk, and other tech luminaries. They've since become public antagonists, primarily over politics.
Hoffman emerged as a major Democratic donor, pouring millions into Kamala Harris' unsuccessful presidential campaign. Sacks went the opposite direction, hosting a Trump fundraiser at his San Francisco mansion and eventually landing his White House role overseeing AI and crypto policy.
The stakes couldn't be higher. Anthropic was founded in 2021 by former OpenAI executives who left over safety concerns. The company has consistently pushed back against Trump administration efforts to block state-level AI regulation, including a provision that would have prevented such rules for 10 years.
Hoffman's defense isn't without conflicts of interest. He sits on board since 2017, shortly after selling LinkedIn to the software giant. Microsoft is OpenAI's key investor and partner. Hoffman was also an early OpenAI investor and remains a shareholder. On Monday, he revealed that Greylock Partners, where he's a partner, has also invested in Anthropic.
