VC’s New Negotiation Tactic: Sabotage of Global Technology Infrastructure
We’ve been talking quite a lot about venture capital as a sovereign, nation-state level power negotiating with other nation-states for sovereign zones, tax breaks, land, labor, freedom from regulation, and their lucrative presence in a nation, which can bring huge amounts of money to politicians and governments. (And markedly, not for the people).
We’ve had a few interesting developments in the last few weeks as multiple tech companies — funded by the exact same venture capitalists — have threatened to outright pull out of nation-states and consortiums of states. This is part of an escalation path we’ve been seeing as venture capital accelerates its grasp on power. We should expect more of this. Much more.
In preceding months, we saw Coinbase open up global trading HQ in the Bahamas in reaction to ongoing tension with the SEC. It has launched a comprehensive global strategy in reaction to these tensions as well. And threatened to pull out of the US entirely. Remarks that Brian Armstrong, CEO, walked back fairly quickly as it spooked the market.
Most recently, in reaction to a new draft for AI regulations in the EU, OpenAI threatened to pull out of the union. Its CEO, Sam Altman, then walked back the threats. In April, they announced plans to open an office and expand in Japan. In this example, we see that what these startups are threatening is something they are very much prepared to do, as they are setting up elsewhere anyway.
And Twitter has also come to a head with major EU regulatory bodies in the past few days, as new regulation comes into effect this summer around mandatory combat of disinformation on social platforms. Twitter has pulled out of voluntary participation in a compliance consortium of other tech super-powers, sparking speculation that Twitter might pull out of the EU entirely, or that non-compliance could lead the EU to shut Twitter down.
A related incident in that Twitter recently followed censorship demands from Turkey during a hotly contested election period, banning accounts critical of the incumbent. New reporting shows that since the transition to Elon Musk’s leadership, Twitter has approved 83% of censorship requests from authoritarian governments. So again, we see a lot of negotiating with nation-states happening across the board and the willingness to make sabotage of infrastructure that people all over the world rely on, part of their sick little games to be king of the hill. While this will be conflict with other nation-states, it is users and in particular social movements all over the globe that will suffer.
Surprise, venture capitalists don’t give a fuck about you.
One of the reasons all of this is so interesting is because all of these companies — three of the most important and visible tech companies in the world — are backed by the same money. A16z is an investor in Coinbase, OpenAI and Twitter. They are also connected in myriad ways by Founder’s Fund + PayPal Mafia. But again we see a situation where what looks like a industry-wide/field-wide phenomenon — this level of hostile negotiation with nation-states over core infrastructure — is actually emerging from a very small conspiracy of venture capitalists. Here we see an example of a message that is actually coming from venture capital appearing in the market to be coming from multiple seemingly unrelated entities or entities that people do not think of as being connected. Other a16z startups have also been talking about getting into new digs; most notably, Adam Neumman’s Flow, who has stated publicly considering a move to Saudi Arabia; and a16z in general feting the Saudis as new revelations about their funding sources roll out and a16z head Marc Andreessen has been seen openly kissing Saudi ass at tech conferences and arranging diplomatic trips for startups there. Saudi Arabia is a clear emerging destination for VC startups, and Dubai has emerged as particularly interesting to VCs as well.
Spotlighted in this environment, is the venture capitalist willingness to cut off key global infrastructure — that they have built an exclusive and illegal monopoly over — from nation-state level entities and as a threat in nation-state level conflict/negotiation. An example was when there were a number of calls to tech companies to shut down access to certain services in Russia as the war began. Putting totally aside your feelings about the war, consider how this illuminates the ability of venture capitalists to shut down, at will, and almost at the push of a button, core global communications infrastructure, supply chain infrastructure, transportation infrastructure, and so on, in nation-states around the world, at the push of a button.
What should be clear to anyone following the VC threat is that that is something they would absolutely fucking do and they don’t give a fuck in the least about other countries except as targets, much less people all over the world who rely on these companies to get access to information, their own relationships, and so on. Important here is that none of these VCs actually “own” the cores of these infrastructures by any natural law; it is all being hoarded and monopolized by them and this small group of assholes should not have anything like this level of power. What they are removing /denying access to isn’t even the functionality they provide on top of a heap of stolen data; it is the connections between people themselves, it is information that has been produced by people, labor produced by people, products produced by people, etc. that they have managed to put a choke hold over after so many years of market manipulation, fraud, financial crime and installation of monopolies.
So they are negotiating with stolen weapons, first off.
As the venture capital mechanism is fusing closer and closer with the Pentagon and towards its own visions of technofascist warfare, we must recognize this capability for shutting off infrastructure as part of a military strategy or a potential military strategy, and as a strategic advantage in many kinds of conflict and warfare.
To put it another way, I think tech can starve countries and crash their economies — especially America’s — by shutting off vital services and that becomes increasingly true as tech enters another period of hyper growth and hyper-integration with global infrastructure. The massive change from the 90s tech to now is the type of growth we should be expecting in the next few YEARS. Speed at all costs, above all, without reason or cause, absolutely mindless, devouring. That is the VC game.
Everything you see of venture capital power, money and control, is going to 10x and 100x over a very short timeframe. That means that this power over global infrastructure will be increasingly concentrated in them and increasingly accessible only through them. The phenomenon of real-time, data-backed applications, with centralized funding and management, brings with it the concept of remote disarm.
This is a pattern — remote disarm, remote detonation — that we are starting to see as a meta pattern across the venture capital playing field. The VC military strategy (out of a16z and Founder’s Fund), has a significant component around interrupting the service and capability of enemy parties; interfering with their surveillance and data, digital infrastructure, their commodity weapons hardware/drone swarms, and so on. The new vision of war is about bringing countries to their knees without setting a single soldier on the ground, and potentially accomplishing mass destruction with a very small number of operators as single operators are able to conduct massive, AI-native, autonomous warfield operating systems.
Infrastructure attacks have always played a key role in warfare and we should not neglect that now, just because the infrastructure we are talking about — social media networks, ride sharing apps, crypto banks/exchanges — is different and the people who can detonate them, is also different.
As we talk increasingly of the aggressive build-out of weapons startups by a16z, Founder’s Fund and InQTel (the CIA’s venture capitalist firm), we need to ask ourselves about this power. Tech companies, who have monopolized most of the communications infrastructure on the planet and who have made huge inroads into other critical infrastructure. They have also established a monopoly over data which means that if they decide to remove access to the application service, there is no way to access the data, which should belong collectively to the people who contributed to it. I wrote a recent article about how to change the model of technology delivery of core services to a utility model, with perhaps the fundamental concept being that data becomes collective data and it cannot be controlled by any corporation or venture capitalist, and that no entity has exclusive domain. The reality is that technology needs to be designed to be resilient to venture capital monopoly, and it is becoming clearer and clearer, the stakes of building that capability — resiliency to the venture capital hostile entity — is very high.
Remote attacks are core DNA to tech. Palmer Luckey, the visionary behind Oculus and a16z weapons company Anduril, recently mocked up a prototype for a head set that can kill the wearer if they die in a video game. DDoS attacks, SWATing, computer viruses, trolling culture, drone swarms, all of these involve the idea of destruction from far away. Many sociopaths and psychopaths have their own signature, the thing that they like the most; for some of them, that is being able to cause destruction, harm and even death through no more than a push of the button. In the VC-owned and operated world, nation-states can be remotely destroyed through a combination of technical attacks, denial of illegally monopolized infrastructure, autonomous weaponry like drone swarms, and so on.
This is a design pattern we should continue to look for. You should pay attention to how quickly and easily VCs and startups are threatening to leave countries — including America — taking money, jobs, and access to critical infrastructure. Recent months have seen a huge array of open and covert threats from Coinbase, from OpenAI, from a16z, from Twitter, all revolving around essentially blackmailing countries into giving them a regulation-free operating environment. This new, aggressive willingness to negotiate on these terms — essentially by holding infrastructure hostage — is only the beginning of what we will see out of these folks as they transform into beast mode and reach new levels of negotiation with nation-states as a sovereign entity.
The problem is not only that tech has these capabilities, but that they are willing to use them at the drop of the hat in spats over regulations, leaving global users hostage to venture capitalists that don’t give a single fuck about them and will use them as bait over and over again in its attempt to establish sovereignty.
Another thing that might strike your notice is that VCs are giving the bird to America and the EU… while pandering to Saudi Arabia, Israel, El Salvador, among others.
Please realize that venture capitalists do not see their future in the EU or America. They see their future in the global south and in right-wing regimes everywhere, where they have significantly more leverage, are highly sought, and are massively courted by politicians who are signing away taxation and regulation for them left and right. VCs are totally and completely aware that they hold America and the EU hostage, and they are perfectly aware that the massive entry into the global market they are working on, will offer more than enough money and resources to them. That is why they are so flip with America and the EU: they don’t give a fuck and that is not where their interest lies, and they know because of the monopolization they have established, that they can opt out of America/the EU, but America/the EU cannot opt out of venture capital and venture capital technology, which is already deeply integrated. Much more so than in emerging super-players like Africa, where VCs have been working on sovereign zones, crypto cities and so on in Kenya and Nigeria. These areas — which have been so damaged by imperialism, colonialism and capitalism — are much more vulnerable, have huge populations, desirable land and natural resources, and represent massive technology markets that are looking to complete the “leapfrog” technology transition.
It must also be said that venture capitalists are moving onto new platforms and their interest in maintaining “legacy” systems over the long term is small. “Upgrading” is a much more difficult and time intensive and frankly annoying thing than going all blue-ocean-strategy. It may very well leave large amounts of technical infrastructure to rot as it moves on to its new digs, the ultimate king makers becoming kings. It is highly possible that adoption will be much faster and more lucrative in these areas which have been “left behind” of venture capital development in the last bubble.
With every passing day we are missing opportunities to stop this trajectory. When venture capital is more established as a sovereign force as a result of all of these dignitary meetings — with Israel, with Saudi Arabia, Dubai, Japan, El Salvador — their threats to cut off infrastructure become realer and realer. And the aims we are dealing with are not just money. They are trying to turn themselves into a nation-state and that ultimate, and urgently felt, goal supplants any simplistic understanding of VC/capitalism as the pursuit of short-term financial goals; as this is capitalism in the shape of a rising fascist state.
One that is exceedingly well-armed, it turns out.