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Charles Duhigg: Yeah. They did hire lobbyists, particularly after Microsoft was taken to court in the late '90s. Everyone in Silicon Valley realized, we got to have a couple of lobbyists, but they didn't like them. They would call them up and gossip with them, but they just thought politics was stupid. They thought it was like if you were really smart, you'd go into tech. If you weren't that smart, you'd go into politics, and they'd give you some senator role or maybe a cabinet position. There was just basically this total dismissal of politics until about 2010. Up until 2010, you could get away with that because most of the Internet companies were just doing their own thing. They were operating on their own. Their biggest goal was don't let Washington DC screw this up.

Then in 2010, a new company emerges, the sharing economy company. This is like Uber and DoorDash and TaskRabbit. They start playing in these industries, labor, driving, delivery, that regulators and politicians have felt like it's their prerogative to oversee and to regulate for decades. Suddenly, you had this situation where Silicon Valley companies were worth a billion dollars and if some city councilor in some podunk town decides to outlaw whether Uber is allowed there, then suddenly you're threatening this huge company. They decide really quickly, and they realize really quickly they have to get smart about politics.

Mary Long: A person who helps these companies get really smart about politics and who is a central character in this article is named Chris Larsen. He started his career in Washington and then moves to Silicon Valley. How and why does Larsen make that move from Washington to Silicon Valley.

Charles Duhigg: Chris Larsen was really a visionary and he's actually a great guy to spend time with. If you ever get a chance to have dinner with Chris Larsen, you absolutely should. But what he did is he was working in the Clinton administration, and he's the guy who is defending the administration from Whitewater and Monica Lewinsky attacks. He actually came up with the phrase, "A vast right wing conspiracy" that Hillary Clinton started using all the time. After the Clinton administration, he realizes the future is in Silicon Valley. The future is out West.

He picks up and he moves to California without a job, and he puts himself out there as a political gun for hire, and he wants to get hired by the tech companies. But the tech companies still don't think that politics matters. He goes and he works for groups like California trial lawyers, for environmentalists here in California. Then, in 2015, he gets a phone call from Airbnb because Airbnb headquartered in San Francisco, had just learned that there's going to be a proposition put on the ballot, Proposition F, which would essentially try and put Airbnb out of business. The argument that the proponents of this ban are offering is Airbnb keeps on driving up rental rates. It makes them more expensive. They keep having these parties and when you move to a neighborhood, you don't expect to suddenly have a hotel up here in the middle of it, they have legitimate complaints. But Airbnb realizes if they don't figure out how to fight this, this is going to happen everywhere and they are screwed.

Mary Long: Larsen and Airbnb get together and maybe how do they get connected in the first place?

Charles Duhigg: It's this wonderful thing where, Brian Chesky knew about Chris Larsen and a number of people, including some of the venture capitalists, had recommended that he reach out to Larsen. At some point, the board of directors is meeting, talking about this crisis, and they call up Chris Larsen on his cellphone, and they say, "Hey, can you be here as fast as possible?" He says, "Sure, I'll be there in 10 minutes." He's at his kids Little League game, and he's wearing like the Little League coaches uniform, and he's like, tells his wife, take care of the kids, gets in the car, runs over to the Airbnb's headquarters, goes to the office. He's before all these folks in suits and really fancy people, and he's in this uniform, and he tells them, "You're seeing this wrong. You guys think this is a crisis. This is actually a huge opportunity."

Mary Long: This opportunity, he effectively mobilizes Airbnb hosts as if they are a voting block. This really stuck out to me. I'm in Denver, Colorado. In this past election in a ton of elections, we have to vote on a lot of propositions and amendments. Like, this past one, we had over 15 that we have to vote on. Of course I go through town and I see signs that are trying to persuade me to vote one way or another. But I have not witnessed anything here that even seems to compare to what Larsen orchestrated back in 2015. How is he able to make Proposition F or any other initiative, like, San Francisco is a big city, bigger than Denver, but how does he go about building such a massive operation for such a small, localized initiative?

Charles Duhigg: Yeah, it's a really interesting question. This is what he saw as the opportunity because you're exactly right. Most of us don't pay any attention to all those propositions or ballot initiatives that we vote on. But Chris Larsen said, "Look, we have an opportunity now. We have an excuse to put together a political campaign that's pro Airbnb." What he does is he goes he recruits a couple of people who had worked on the Obama campaign. Some of them were already there. He brings in more, and they start hiring people like crazy. They tell these folks, here's what we want you to. We want you to call every single Airbnb host, anyone who's rented out their property via Airbnb in San Francisco and ask them if they'll write a letter to their local politician, if they will have a meeting where they invite their friends to learn about why Airbnb is so important.

We want you to register people to vote. We want you to be vocal. Then they do the exact same thing with everyone who stayed at an Airbnb in San Francisco. Suddenly, these valid propositions, you're exactly right. There's usually five or 10 people working on them, maybe 20. They have thousands and thousands of people out there who are canvassing, who are knocking on doors, who are asking people to host home meetings, and the message is the same every single time. Airbnb is important, Airbnb is innovative. It gives nurses and teachers a way to make money by renting out that spare bedroom, and if you oppose Airbnb, then we, the voters, we're going to kick you out of office. We are the Airbnb voter.

Mary Long: So Airbnb winds up winning this initiative, correct?

Charles Duhigg: Overwhelmingly, yeah.

Mary Long: Obviously I'm going to ask you about money [laughs] because I'm hearing about all these resources and even just comparing it to how most local initiatives turn out. I can assume that it takes a lot of cash to get that manpower behind this initiative to make these fights happen. In 2015, when this is playing out, Airbnb has an insane valuation, but it's yet to make a billion dollars in revenue. Obviously, whatever money they spent on making this happen had a great return on investment because it's still around today, and the proposition worked out in the company's favor. But back then where is all the money? Whatever it costs to back this? Where is all that money coming from?

Charles Duhigg: It's coming from Airbnb. It's most importantly coming from their venture backers. Airbnb ends up spending $8 million opposing Proposition F. That's roughly 20-30 times as much as all of the advocates for Proposition F combines spent supporting it. It comes directly from Airbnb, and the argument behind it is pretty simple. Airbnb goes to their venture capitalists and they say, if this succeeds in San Francisco, every other city is going to try and do the same thing. This is an existential threat. You have an investment right now in a billion dollar company. But if this starts passing, if we don't have the ability to rent in many large markets, then we're no longer a billion dollar company. We're $100 million maybe even less company. In order to protect your investment, we want to take some of the money you gave us and use it on politics. It turned out that the ROI, the return on investment for Airbnb was fantastic because they protected a now multibillion dollar brand and business, simply by spending $8 million to defeat this proposition.

Mary Long: There is this great line in your article. It's a quote from a VC who says to Larsen at a party or something, a few years after he's become Airbnb's head of global policy and public affairs. This VC says, "It used to be hiring the right CFO was the important thing to making sure a company goes public. But you've proved a political person is just as important." We're a chauffeur investors, so much of this world, feels so far removed from the information that individual investors typically have access to. Somebody who's sitting at home and listening, how can they learn to better evaluate a company's political efforts, whether that's the money that they're spending on these efforts or the person that they're putting in charge of spearheading them?

Charles Duhigg: I think the answer to both is looking, just paying attention to it. Be cause what you're going to find is there's a bunch of companies that give campaign contributions, and the campaign contributions are basically worthless. It's the price of admission to be able to call up a senator or call up a congressman. But then there's other companies that say, we are going to organize voters for you, and this is the big shift. With Chris Larsen, Silicon Valley moves its focus from Washington DC and hiring lobbyists to elections and hiring people who can sway the voter at home.

When the company does that, they actually have not only the power of giving some politician a dollar, they have the power to go in and say, look, we have 30,000 people inside your district that we've identified that care about our issue. If you don't help us out, if you don't vote the way we're asking you to vote, we're going to send every single one of them a message saying, "You should vote against Senator X because he opposes everything that's right and good about innovation and democracy." For investors, as you're looking at these companies, do a little bit of research to see, are they simply just handing out cash, or are they actually going out and doing campaigns that target voters to say, We think you are an Airbnb voter, or we think you are an Uber voter, and we want you on our side. If they're organizing, they're going to be even more effective.

Mary Long: A really important point to all this is that, a key part of Larsen's strategy is not to side with one part of the aisle versus another, not to label an issue as a Democratic issue or a Republican issue, but to intentionally be, I guess, bipartisan is the right word. Or just, to not tie an issue to a particular party over another and instead to focus on this the Uber voter, the Airbnb voter.

Charles Duhigg: Exactly.

Mary Long: In 2015, that seems to me to be a pretty compelling picture to paint, in part because at that point, despite it's huge valuation, Airbnb still an underdog, a little bit. Do you think that that changes at all as companies scale? Now, if Airbnb were to face a regulatory issue, I would assume it would look a little bit different than Proposition F did almost 10 years ago. But do you think it has the ability to mobilize its host in the same way now that it did then?

Charles Duhigg: It does and I think, particularly when we get to crypto, we'll see how that manifests, because what has happened is that you're exactly right. These companies were the underdogs. They saw themselves as fighting the giants and putting together resources in a clever way to win over voters. But today, tech companies are the giants, and yet they have not given up how well they can communicate with their users, with their customers, with their clients.

If you go back 20 or 30 years, the only groups that could mobilize 10,000 or 20,000 voters were groups like the labor unions, that could turn out their membership. Maybe churches, priests go on the pulpit or pastors go on the pulpit and tell everyone to go vote a certain way, maybe country clubs could turn everyone out. Now, labor unions, churches, country clubs, they're all in decline. What is emerging in its place? The tech companies, the platforms. Airbnb has the ability to speak to over a billion people just by pushing a button. Facebook can put things in our feed every single day. We just saw what happened with Twitter, now X and Elon Musk, jamming it with the message that he thinks is important. The only people who can mobilize voters today with this efficiency are the tech companies, and because they're no longer the underdogs, they now have things that they want, they've essentially become bullies, and they threaten politicians. If you don't go with us, we're going to come and get you.

Mary Long: Let's move to crypto, because that is a industry where you see this influence or you in particular, Charles, who was reporting on this, see the influence that industry has had on politicians. Before we dive more into that, I want to broadly step back, and I love your take on how we were talking before we started recording about how even pre election. You're hearing crypto markets are a lot quieter than they used to be in 2020, 2021. But there is a lot happening behind the scenes. Again, even pre election, a lot of these coins had shot up to all time highs. Now they've gone even further. But along with that within that paradox, I'd also noticed a change in how a lot of politicians spoke about crypto. Only a few years ago, it was very normal to hear many politicians, no matter their party association, express a lot of skepticism when it came to crypto. That is no longer the case. What caused that change?

Charles Duhigg: It's a really interesting story because you're exactly right. The crypto industry has been incredibly active over the last few years. But in contrast to what they used to do when they would have fights with each other on Twitter and they would make these big announcements, now the adults have stepped in, the professionals are here, and they want to do everything as quietly as they can.

A couple of years ago, Coinbase, one of the largest crypto exchanges here in the US, one of their funders, a board member, said, "You should hire Chris Larsen." Chris Larsen was still at Airbnb. He was still doing Airbnb stuff, but they said, you should start working with Chris because what they did at Airbnb, we should do it for crypto. Chris comes in and he makes the same basic spiel. He says, "This is an opportunity. What we need to do is we need to convince politicians who right now are beating up on crypto and saying it's a scam. We need to convince them that there's actually a crypto voter. There's someone who will only vote for you if you support crypto and will vote against you if you're anti-crypto. If we can do that, then suddenly the politicians will be terrified to cross us." Now, there was, at the time, some legitimate question as to whether a crypto voter existed. The Fed had done a bunch of studies that had shown not many people own crypto, and the people who did own crypto. It wasn't at the top of their list of priorities on how they made decisions about politics. Chris Larsen said, "If a Crypto voter doesn't exist, we're going to create one." They go out and they start conducting these polls, polls that show that many millions of people, 50 million people own cryptocurrencies, and that this is the most important thing in their life. They start building the army, and the army, the ground troops are really important because in every district, the politician from that district, the elected official knows if there's 10,000 or 5,000 people who are against me, then they can actually flip this election. I could lose just because of this small group being vocal enough that they hate me.

The easiest way to make sure that they don't hate me is just not to get on the hit list for crypto. So I'm going to stop saying anti-crypto things. But that's not enough because you don't want people just to stop saying anti-crypto things, you want them to actually say pro crypto things. Here's the second prong of this strategy. First prong is build your ground army by recruiting people to say that they are the crypto voters. The second prong is, we are going to go spend millions and millions of dollars attacking politicians who are anti-crypto or who we can paint as anti-crypto.

Once we get them defeated, once they know that if you're not on the side of crypto, we're going to come after you and we're going to attack you, all of a sudden politicians will start flocking to us and we'll start saying that they think cryptos the best thing on Earth. The case study of this was Katie Porter in California. Katie Porter in California was a congresswoman who represented Orange County, and she become pretty well known because she was really good on TV, and she decides to run for Senate to replace Diane Feinstein. There's a couple of other people in the Senate race, but she's a strong contender. She's expected to at least come in second in the primary, which will get her a chance to run in the general runoff election.

But with just a few weeks before the primary election, a group named FairShake, a Super PAC, which it turns out is actually backed by some of the largest crypto investors and some of the largest crypto companies, comes in and they announce that they're going to spend $10 million overnight attacking Katie Porter. Now, $10 million might not sound like a lot of money, but in a Senate race, it's a huge amount of money. Katie Porter had raised $30 million to finance her entire race, and that had taken her years and years. Here this group is coming in saying, overnight, we're going to spend $10 million attacking you and then they release the ads. The ads don't say anything about crypto or tech.

They don't reveal who the funder is or what FairShake cares about. What they do instead, is they make all these basically baseless accusations of Katie Porter. They say that she's a bully, that she's mean to people, that she takes money from Big Pharma and big banks, which, in fact, is not true at all. But it works. When people go to the polls, they vote for other people besides Katie Porter. She comes in third, she's knocked out of the race, and the message is sent across the nation. If you are someone who is not adamantly pro crypto and Katie Porter was not adamantly pro crypto, then we can come in and we can send missiles to nuke your candidacy, and we'll win.

Mary Long: Yeah, that's the thing that sticks out to me so much in this because I was going to ask you Katie Porter has not come out at all as being anti-crypto, but she gets internally labeled as such within FairShake for not being pro crypto. [laughs]

Charles Duhigg: It's even more tenuous than that. Basically, they decide that she's anti-crypto because she's friends with Elizabeth Warren. Senator Elizabeth Warren is, in fact, anti-crypto. But Katie Porter really hadn't said anything about crypto, but she was easy to paint as anti-crypto. The people who are funding this FairShake and the companies that are funding FairShake, they don't actually care about Katie Porter. They don't really care who wins or loses this race. What they care about is sending a message that terrifies other people. What they effectively said was, it doesn't even matter if you're pro or anti-crypto in your heart. If you're not pro crypto in what you're saying, we might come after you anyways and that's scary.

Mary Long: All told, I think this election cycle FairShake raised over $170 million, which is more than any other Super PAC. Are there any grumblings of a resistance or something building that's counter to this movement?

Charles Duhigg: Yeah. I should mention, it's not more than any other Super PAC, but it is close to more than any other Super PAC, particularly Super PAC that is funded by corporate donations, just because there's the Trump Super PAC, which is huge. But yeah, there is this resistance that's emerging. What's interesting is it's emerging around Chris Larsen's next battle, AI.

After working with Coinbase for a little while, Larsen goes to Open AI, and he's brought on there to essentially do for AI what he did for Airbnb and for cryptocurrencies at Coinbase, which is to figure out how to have influence over politicians, to figure out how to be a part of the conversation where they can't ignore you. If you want, you can actually push the politicians around and get them to do what you want. What's interesting, though, is that when it comes to crypto and when it comes to Airbnb, pretty much all the tech industry, all of Silicon Valley, they're in alignment. They think Airbnb is good. It should be allowed to operate. Some of them aren't huge crypto fans, but they're fine with crypto plugging along. They don't think that crypto should be made illegal. When it comes to AI, though, within the valley, there's a huge division. There are some people who think we should be developing AI as fast as humanly possible. In fact, if we don't, China will and we want to have democracies rather than authoritarian governments controlling AI technology. But there's other technologists who say, that is terrifyingly dangerous. AI is so powerful that the robots could rise up and kill all of us and take over the world. We have to be very cautious about how we develop AI. Now, for the first time, what we're seeing is a debate within the valley over the politics of how AI should be regulated. Chris Larsen and Open AI, they are at the center of that debate, but there are other powerful people who disagree with them and who are opposing them.

Mary Long: Do you have any insight into what those other powerful people are? When I think of this, it comes to mind is like, you've got Open AI and Sam Altman. Then I would say, on the other side, you have Anthropic and Dario Amadi. They have perhaps, smaller than Open AI, but they've got big money backers, too. Jeff Bezos has backed Anthropic. They're calling for Dario before he founded, Anthropic was Director of Safety at Open AI. He's calling for a more cadenced safety first type approach. What are those tensions looking like?

Charles Duhigg: How does it play out? It's really hard to tell because it changes every single day. Open AI also talks a lot about safety. They say that safety is important. I also mentioned that Anthropic which used to be put safety first, is now growing very quickly, and some people are saying that they're putting safety to the side because it helps them financially. I think the answer is, nobody really knows how this is going to play out. They know that there's some people who feel much more cautious than other people. They know that the federal government, the US government is going to regulate AI at some point. What they want is they want to seat at the table. They don't know what the regulations are going to look like.

They're not even certain what regulations they like and which ones they dislike, but they know that if they aren't at that table, they won't have a voice in how the regulations get written. The best way to protect their financial interests is to make sure that they have political clout, that they have the ability to threaten or to cajole politicians because they have enough money behind them to threaten whether they get elected or not. Once that's true, then regardless of where the conversation goes, they'll be participating in it and they can help shape it.

Mary Long: There's a line really early on in your article where you warned that Silicon Valley's new position as perhaps, the most powerful lobbying force in American politics, allows it to wield great power and "Remake the nation as it sees fit." What does that vision look like? How do the tech corporations want to remake the nation?

Charles Duhigg: I think there's a charitable answer to that and an uncharitable answer to that.

Mary Long: Let's hear about it.

Charles Duhigg: The charitable answer is that there's a lot of people who are techno optimists, techno-utopians. Mark Andresen who's one of the biggest venture capitalists in the world, and one of the most powerful people in tech, he's written a manifesto about this. What they believe is that they believe the solution to our problems is through technology. Things that allow technology to prosper should be embraced and endorsed because they'll make the world a better place. If you look at history, there's a lot of arguments to support that vision. Think about a world before antibiotics were developed. Think about a world before the internal combustion engine was widespread. Think about a world before there were computers.

Those were worlds that had greater levels of poverty. They had greater levels of people dying early because they couldn't fight disease or they couldn't get transported to places that they could find that treatment. Technology has, in fact, improved our world a lot. Now, what some people would say to the techno-optimist is they say, yes, you're right. However, like anything, if you eat too much of it, you're going to get sick. The thing that we're worried about is that you think all the answers come from technology and that all technology is good. What we actually think is that if we don't do it slowly, if we don't take baby steps, if we don't stop ever so often and ask ourselves, are we still doing the right thing? Then what we're going to end up with is we're going to end up with weapons that are powered by AI.

Some rogue country could set upon America and that we would be hard to defend against. That's the generous version of what Silicon Valley wants for the future. The less generous version is, they just want to get rich. [laughs] They will support whatever helps them grow their profits and grow their dividends and grow their stock prices. In fact, we do see some of that. President Biden proposed exploring taxing unrealized gains. I'm not a huge fan of that because it seems like really complicated to me.

But Silicon Valley reacted as if he had said that he thought we should all go murder our mothers overnight. The reason why? Is because almost all of their wealth is created in unrealized gains. They learn how to borrow against it so that they don't have to sell it off and realize those gains. There is an ungenerous way of looking at Silicon Valley in the future that they are seeking that is probably partially rooted in truth, that what they really like to do is they'd like to continue the golden days going and line their pockets as much as possible.

Ricky Mulvey: As always, people on the program may have interests in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and are not approved by advertisers. The Motley Fool only picks products that it would personally recommend to friends like you. I'm Ricky Mulvey. Thanks for listening. We'll be back tomorrow.

Mary Long has positions in Airbnb. Ricky Mulvey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Airbnb, Coinbase Global, DoorDash, Microsoft, and Uber Technologies. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Charles Duhigg on How Silicon Valley Learned to Lobby was originally published by The Motley Fool