Two original members of the PayPal mafia, Reid Hoffman and David Sacks, are dragging their decades-old relationship into a public AI brawl. The dispute, which exploded on X on Monday, centers on Anthropic, a San Francisco-based AI company backed by Reid.
David, who now serves as President Donald Trump’s handpicked AI and crypto czar, attacked the startup last week for what he described as regulatory fear tactics. Reid, who helped co-found LinkedIn and sits on Microsoft’s board, fired back hard.
“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,” Reid posted. “That’s why I am intensely rooting for their success.”
Reid confirms stake in Anthropic and backs their AI approach
Reid revealed that Greylock, the firm where he’s a partner, has also invested in Anthropic. That came on top of his previous early stake in OpenAI, making him one of the few tech insiders with money in both AI rivals.
He said he usually avoids public commentary about the two companies but made an exception this time. “In all industries, especially in AI, it’s important to back the good guys,” Reid wrote in the same X thread.
Reid has been sitting on Microsoft’s board since 2017, shortly after selling LinkedIn to the company for $26 billion. That same Microsoft now stands as OpenAI’s primary partner and funder, with its Azure infrastructure powering GPT models across sectors.
Despite the conflict of interest, Reid still went out of his way to defend Anthropic, which was founded in 2021 by several OpenAI defectors who left over safety disagreements.
The original rift between Reid and David has nothing to do with AI. It’s political. Both men were part of PayPal’s founding team back in 1999, along with Elon Musk, Peter Thiel, and Max Levchin, but have since landed on opposite ends of the political universe.
Reid is one of the top Democratic donors in Silicon Valley. He gave millions to Kamala Harris’s failed presidential campaign. David, meanwhile, went full MAGA, hosted a Trump fundraiser at his San Francisco home, and now runs federal tech policy from inside the White House.
Sacks accuses Anthropic of regulatory fear-mongering
The flashpoint came last week, when Jack Clark, Anthropic’s policy chief and co-founder, published an essay titled “Technological Optimism and Appropriate Fear.” The post argued for thoughtful guardrails in AI development.
That’s when Sacks lashed out, saying Anthropic was “running a sophisticated regulatory capture strategy based on fear-mongering.” He added that the company was “principally responsible for the state regulatory frenzy that is damaging the startup ecosystem.”
Anthropic has opposed efforts by the Trump administration to block states from setting their own AI rules for 10 years. They’ve argued that state-level regulation is crucial for keeping AI systems safe and accountable. Sacks isn’t having it.
On Monday, after Reid went public, Sacks responded: “The leading funder of lawfare and dirty tricks against President Trump wants you to know that ‘Anthropic is one of the good guys.’ Thanks for clarifying that. All we needed to know.”
Elon Musk, who now runs his own AI firm, xAI, chimed in minutes later with one word: “Indeed.” Reid didn’t let that slide. “Shows you didn’t read the post (not shocked),” he wrote back. “When you are ready to have a professional conversation about AI’s impact on America, I’m here to chat.”
Then Jason Calacanis, co-host of the All-In podcast with Sacks, invited Reid to come back on the show this week, writing, “Come on the pod.” Reid had been on before by the way, in August, right before the 2024 election. He replied that he was “open to coming back on” but “this week is packed.”
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