There's a New Czar in Town

Why Trump's pick of David Sacks is a big deal

(image:ideogram.ai)

On December 5th, President-Elect Trump announced the appointment of Cape Town-born David Sacks as "AI and Crypto Czar" for his incoming administration. There has already been some reporting around the outsized power of ex-South Africans in US politics, technology and media (including this roundup from Rebecca Davis), which has covered a number of South African spawn such as Elon Musk, Peter Thiel, Joel Pollak, Roelof Botha and others. Sacks' new appointment elevates him to the top ranks of national influence but his South African origins are less interesting than the nature of the appointment, which has alternately raised eyebrows and drawn praise from various sections of the commentariat.

The title itself bears some discussion. One wonders about its genesis in the US where, presumably, Russian nouns are not much favoured in the White House. In any event, "czars" are not new to modern American politics. Over the last couple of decades, there has been a drug czar, a terrorism czar, an AIDS czar, an inflation czar, a border czar and even a car czar (in the 90s, when the US car industry was near-dead).

The first Russian czar, or Tsar in his case, was Ivan the Terrible in the 16th Century, who reputedly killed 4,500 people with his bare hands and was fond of displaying severed heads around town. One might be forgiven for assuming that unfettered autocratic powers come with the title but, alas, at this point David Sacks will only be responsible for "policy guidance, legal frameworks, industry collaboration and oversight of federal agencies" - no mention of blood and gore.

Why is this a big deal? Because it sends a very clear message from the incoming administration that AI and crypto are the two most important technologies in the country (if not the world), important enough to justify a specific and unusual White House appointment. There is no manufacturing czar, health czar or social media czar (all pressing pain points in the US, among others). There is only an AI and crypto czar. One technology was invented a mere 15 years ago, the other bubbled away anonymously in university and research lab petri dishes for 70 years, before bursting suddenly onto the public stage when ChatGPT was launched two years ago. These are very young technologies and their precociousness is being rewarded by a special appointment and the president's ear.

Actually, it’s not just about precocity - although it’s cute to think of them that way. The special appointment can be seen as a harbinger. AI and crypto (as I have argued on these pages for some time) are the most transformative technologies since (OK, let's stretch here) the printing press, electricity, the radio, the automobile, the Internet. They are revolutionary not just in terms of their future impact but also in terms of their sudden arrival and their continuing dizzying rate of evolution.

Crypto is, at its core, an unprecedented new way of owning and transferring assets. Consider that the entire history of human malfeasance has been largely a series of insults against secure ownership - theft, fraud, breach, seizure, scalping, price gouging, excessive taxation, excessive fees, plagiarism, inflation, unauthorized spend, identity theft, financial manipulation, undeserving middlemen, and onward down a sorry list of activities that have enabled humans, institutions and governments to purloin things that do not belong to them.

Crypto fixes this, or at least offers a path for doing so. Bitcoin, the best known, is just one tiny corner of a vast array of crypto-fuelled applications that change the game in favour of our right to hold and move value at our discretion, securely and without interference or threat.

AI, on the other hand, is bringing us an entirely new set of mega-capabilities (whose opportunities and threats are still a matter of debate). It is the first technology ever invented that can learn and, increasingly, can learn autonomously. Moreover, it can learn things that humans can’t. We do not fully understand what this means or portends; we have never been faced with the prospect of a machine that can learn faster and more efficiently than we can.

Utopian and dystopian narratives about AI abound but any technology that can produce 200 million scientific analyses in a matter of weeks - something that several thousand scientists would take a century to do, as in the well-documented example of the AI called AlphaFold which analyses protein structures - while also allowing undetectable and deeply damaging deep fakes loose on social media, needs to be constrained and guided quickly. Today. Not in a few years, after regulation has made its torpid way through the halls of bureaucracy. It might then be too late.

What qualifies David Sacks to do this? He is a Stanford graduate with a host of tech notches on his belt, having worked as COO for PayPal with Elon Musk and subsequently building and selling a number of high-profile companies before he settled into a successful venture capital career. He is neck-deep in AI and crypto investments; we can take it that he knows his way around the tech.

You will notice that I have not ventured into Sacks' politics. He is indeed conservative, perhaps even teetering on the extreme right on some issues, but I would suggest that, in this case, his political views are secondary when it comes to the levers which he now has within his grasp to influence the development of two technologies which are (contrary to some opinions) non-partisan. I understand that this view may provoke some scepticism. A powerful operative can certainly turn a technology into a political tool if they are cynical enough, as Elon Musk did with X, but it is not a given.

Sacks has impressive technology credentials and he will be advising on technologies that will far outlast presidents and will have infinitely more impact. Notwithstanding his friendship with ideologues like Musk and Thiel, I am withholding judgement at this stage. His job is future-critical, and I wish him well.

Steven Boykey Sidley is a professor of practice at JBS, University of Johannesburg. His new book It’s Mine: How the Crypto Industry is Redefining Ownership is published by Maverick451 in SA and Legend Times Group in UK/EU, available now. Copy edited by Bryony Mortimer.