The episode features David Sacks, entrepreneur, venture capitalist, and current AI and Crypto Czar in the Trump administration, in conversation with Salesforce CEO Marc Benioff at Dreamforce. Sacks co-founded PayPal, created enterprise social network Yammer (acquired by Microsoft for $1.2 billion in 2012), and co-hosts the All-In podcast.

Sacks shares his journey from South Africa to Stanford to PayPal's early days with approximately 20 employees, working under both Peter Thiel and Elon Musk. He discusses the formation of the PayPal Mafia, his transition to founding Yammer, and his eventual move into venture investing.

The conversation explores Sacks' unexpected entry into government service, beginning with hosting Trump at his San Francisco home on June 6, 2024 (D-Day), and culminating in his appointment as AI and Crypto Czar plus chair of the President's Council of Advisers on Science and Technology (PCAST).

Benioff and Sacks discuss the contrast between Silicon Valley's ecosystem mindset and Washington's control-oriented bureaucracy, the US-China technology race, and Sacks' policy goals for AI innovation, crypto regulatory clarity, and American technological leadership over the next 36 months.

From South Africa to PayPal's Early Days

Sacks was born in South Africa, immigrated to Memphis at age 5, attended Stanford graduating in 1994, then went to law school from 1995-1998. "I thought I'd missed the whole internet thing because I graduated in '94 and then I went to law school" - David

Peter Thiel recruited Sacks to PayPal when the company had about 20 employees in 1999. "I got a phone call from Peter Thiel who I knew from Stanford and he was creating a new startup that would become PayPal" - David

The 1990s lacked entrepreneurial infrastructure compared to today. "No one knew how to be an entrepreneur. There was no YC. There was no blogs out there explaining how to be an entrepreneur" - David

PayPal became the first company to IPO after the dot-com crash, operating from 1999 through 2002. After eBay's acquisition, the company "never really made an effort to keep the talent" viewing them as "renegades who'd be hard to manage or control" - David

"I call it less of a mafia and more of a diaspora. eBay kind of took over our homeland and burned our temple and kicked us all out" - David, explaining how the PayPal Mafia formed when talent dispersed to start new companies

Learning from Thiel and Musk's Leadership Styles

Elon Musk is "incredibly hands-on" with 20 direct reports at each company, "very involved in every important decision and certainly every product decision" - David

Peter Thiel operates as a delegator, "more high level, just wants to make sure that we have the strategy right and then tries to hire good people and kind of just lets them do their thing" - David

Musk manages five major companies by dedicating specific days: Tuesday at Tesla, Wednesday at XAI, Thursday at SpaceX, Friday at Neuralink, often working until 2:00 AM with tremendous focus on technical details

When Musk acquired Twitter, Sacks observed him "spend about a month really drilling into every system in the company" until "he had the whole thing in his head and then he felt like he could manage it the way that he wanted" - David

Sacks adopted a hybrid approach: "When it came to the product, I sort of micromanaged the way that Elon does. But when it came to other parts of the company, I just tried to find the best people I could and give them the authority necessary to do their jobs" - David

Yammer's Rise and Microsoft Acquisition

Sacks created a family social networking company around 2003-2004 that "wasn't quite right" and pivoted into enterprise social networking, launching at TechCrunch 40 conference in 2008 where Yammer won

Benioff recognized the social enterprise wave, making it a Dreamforce theme around 2010. "You saw that this social networking thing was going to be a huge wave and it was going to change the way that we work" - David

Microsoft acquired Yammer in 2012 as part of their strategy to reposition Office suite as "cloud, social, and mobile" during an "existential crisis" about the shift away from traditional software

Sacks worked under Steve Ballmer at Microsoft for about a year. "I thought it was very interesting to see how a company that big works" - David, noting Ballmer could speak to auditoriums of 90,000 people for an hour without notes or teleprompter

The All-In Podcast and Political Evolution

The All-In podcast started five years ago during COVID with people Sacks "played poker with" asking "wouldn't it be fun if we just recorded our conversations at the poker table?" - David

"When you do a weekly podcast, you just have to say what you think, otherwise what are you doing there" - David, explaining how covering major news topics weekly naturally led to more political engagement

Sacks moved to Florida during COVID lockdowns, initially supporting Ron DeSantis for his pandemic management. "I thought DeSantis did a great job managing Florida as governor through that transition" - David

"Eventually I just decided that I came to see Trump as the indispensable figure in affecting the political change that we needed in this country" - David, explaining his shift to supporting Trump

June 6, 2024: Trump's San Francisco Visit

"I remember that date because it's D-Day. And it felt like D-Day when President Trump came to San Francisco" - David, describing the event at his house on June 6, 2024

Trump had spent the previous month "being tortured in this very political trial" by Manhattan DA Alvin Bragg, forced to sit through the entire proceedings before coming to Silicon Valley

Despite media attempts to organize protests, "there were hundreds and hundreds of people along the roads waiting for him, but they were all pro-Trump demonstrators, and there was no protest element" - David

"The first thing he said to me when he got to my house was 'Am I in the right city?' because he was surprised that the reception for him was so positive in a liberal bastion like San Francisco" - David

Transition at Mar-a-Lago: The Room Where It Happens

"It was like being in King's Landing. Have you guys ever watched Game of Thrones? It felt a bit like King's Landing" - David, describing the post-election atmosphere at Mar-a-Lago

Sacks arrived Monday morning after the Tuesday election. "I walked into the living room of Mar-a-Lago and the president was there wearing a suit but no tie yet, walking around with heads of state calling him on speakerphone to congratulate him" - David

"You had all these people who were there like job seekers and supplicants waiting in the living room to meet with him. It was surreal" - David, contrasting himself as someone without a predetermined agenda

The president likes "having these crossfunctional roles" and "hiring people from business in the administration" citing Jared Kushner and Steve Witkoff's recent success negotiating hostage releases in Gaza despite being "the most disparaged members of the administration" - David

Originally offered just the AI Czar role, Sacks ended up with both AI and Crypto Czar positions. "They weren't really happy with their choices for crypto either and they're like 'hey can you do both of these' and I was like 'sure why not'" - David

Crypto Policy: From Regulatory Chaos to Clarity

Sacks bought Bitcoin for the first time in 2011 and co-founded Harbor in 2017, a company designed to tokenize real estate, giving him relevant background despite crypto not being his sole focus

"The whole crypto industry was in the process of moving offshore" due to four years of "arbitrary prosecution during the Biden years" driven by Elizabeth Warren's agenda with Gary Gensler at the SEC - David

"Gary Gensler would not say what the rules were, just prosecuted people. It was regulation by enforcement. That's really scary to entrepreneurs - you're going to find out what the rules are when you get indicted" - David

The crypto industry's primary need was simple: "Just tell us what the rules are. Make the rules clear, fair, and sensible so they wouldn't be subject to arbitrary prosecution" - David

President Trump recently signed the Genius Act into law, creating the regulatory framework for stablecoins. The Clarity Act has passed the House and is moving through the Senate, expected to become law within months

Sacks chaired a presidential working group on digital assets producing "a pretty thick report" on crypto rules, working cross-functionally with SEC, CFTC, Treasury Department, and other agencies

Goal for crypto in 36 months: "I'd love to see the Clarity Act passed and signed into law. At that point, crypto will be normalized as an asset class with a regulatory framework in the US" - David

AI Policy: Innovation, Infrastructure, and Exports

"The US is currently in an AI race and our chief global competition is China. They're the only other country that has the talent, the resources, and the technology expertise to basically beat us" - David

President Trump outlined AI policy pillars in a July 23rd speech focusing on three areas: innovation, infrastructure, and exports

On innovation: "To win this AI race we have to be the most innovative. You can't regulate your way to beating your competitor. In the United States the innovation comes from the private sector not the government" - David

On infrastructure: "We have to have the most AI infrastructure in the US. All the new data centers require tremendous power. Getting ahead of the curve on energy, standing up AI factories" - David

On exports: "We want the US technology stack to dominate globally. You want to have the biggest ecosystem - the most developers using your API, the most apps in your app store. We want everybody building on top of your technology stack" - David

China has formidable capabilities: "Half the world's AI researchers are in China. They have four times the population that we do, potentially four times as many AI researchers" - David

"If I was Chinese I'd want to win the AI race for China but I'm American so I want to win the AI race for America. There's no animosity in that" - David

Export Controls and the Huawei Challenge

Starting around 2022, the Biden administration put export controls on advanced semiconductors going to China. "The policy is the most advanced we don't ship, less advanced we allow, and there's always a debate about where that line's going to be" - David

Sacks advocates nuanced policy: "I don't think you want to sell China our latest and greatest chips because it would be too much of an advantage. But if you deprive them entirely there's two issues" - David

First issue is reciprocity: "These two economies are still interlinked in important ways. You saw that recently with rare earth - China basically cut us off. As long as there's things we need from China, we're going to have to reciprocate" - David

Second issue is competition: "If you compete in China, you take market share away from Huawei. China wants Huawei to dominate the Chinese market and then use that to dominate the whole global market" - David

"What would Huawei want? Huawei wants all American chips banned in China so they can dominate that huge market for themselves. It would be a subsidy for Huawei to give them a monopoly" - David

Recently, the Chinese government indicated they don't want American chips. "Their play right now is doing everything they can to boost Huawei up so it can be a national champion and compete with the Americans on the global stage" - David

Silicon Valley Mindset vs. Washington Bureaucracy

"Every country that we exclude from our technology alliance or ecosystem, every country that we say can't buy American chips or AI models, where are they going to go? They're going to go to China" - David

American allies like UAE (first country to sign an Abraham Accord) face restrictions. "They just want to be partners with the United States, yet we've put all sorts of restrictions on their ability to do business with us" - David

"Wealthy countries like Saudi Arabia or UAE want to do business with us, want to buy our stuff, and we're not making it easy for them by imposing all these restrictions. We're not the only game in town" - David

"Everyone in Silicon Valley understands that you want to create ecosystems, have a large ecosystem with lots of participants. That's a hard concept for Washington to wrap its head around because what Washington wants is control" - David

"The bureaucracies want to control these decisions, want you to apply for a license and get their permission to do business. If we let the bureaucracy win, we're going to kill American competitiveness all over the world" - David

36-Month Vision for American Technology Leadership

For crypto: "The Clarity Act passed and signed into law by President Trump. Crypto will be normalized as an asset class with a regulatory framework, and it'll be up to agencies to implement our recommendations" - David

For AI: "Three years from now we feel that the US is still the leader and hopefully the dominant leader in this area of technology with tremendous innovation happening that is competitive" - David

"We like to see competition. We don't want there just to be one or two winners. We want there to be lots of winners. But the US is perceived as still the leader in this dynamic industry" - David

For PCAST and science: "A return to gold standard science. These universities doing scientific research that's genuinely Valuable, unbiased, ideologically unbiased and truly useful" - David