Hello and welcome to Regulator, a newsletter for Verge subscribers about the car crashes piling up on a daily basis at the Washington-based intersection of technology and politics. If you’re not a subscriber, sign up for our fine editorial enterprise today, especially as we process the end of Musk v. Altman. And if you have any tips about impending or hidden Washington car crashes, send ’em over to tina.nguyen+tips@theverge.com.
A quick note: Regulator will be on hiatus for the next two weeks while I take a much-needed vacation. Unfortunately, this means I’ll be missing the public release of Pope Leo XIV’s encyclical on humanity in the age of technology, which I have been hearing about for months, but I anticipate that the rest of the Verge staff will be all over it, so bookmark us!
Heated rivalry, AI super PAC edition
Here’s a weird sign of the AI super PACs becoming their own political behemoths: They’re now becoming their own political weaknesses. On Tuesday, New York Democrat congressional candidate Alex Bores, whose campaign leans heavily on promoting AI regulation, challenged Leading the Future — the $100 million pro-AI super PAC funded by Palantir’s Joe Lonsdale, Andreessen Horowitz, and OpenAI’s Greg Brockman — to an in-person, real-world debate. In a press release, the Bores campaign laid out their conditions: Leading the Future could pick the moderator, it could pick its own representative, but it has to commit to a debate before the June 23rd primary.
The likelihood of this debate taking place is slim to none. (Leading the Future declined to comment about the debate challenge.) Still, it’s a rapid escalation in a phenomenon I’ve been tracking for months: AI industry super PACs gaining their own political reputations, reflecting the companies and founders who fund them, then using those reputations to fight each other.
When Leading the Future was launched last year, it was fairly typical for a super PAC, in that it was backed by several wealthy individuals and companies with shared policy goals, operating on both the state and federal election level. (It was, of course, politics on steroids: The Supreme Court famously ruled in Citizens United that corporations had the right to free speech, leading to the creation of special campaign finance vehicles that allowed companies and wealthy donors to donate unlimited sums toward political advocacy groups.) But shortly afterwards, Meta announced that it was launching its own AI-focused super PACs — a sign that the company’s AI interests, political and otherwise, were not necessarily aligned with the entities funding Leading the Future. Over time, LTF came to be viewed as a vehicle not for the general AI industry, but for OpenAI specifically. (Several of LTF’s backers are investors in the frontier AI company.) That perception was solidified earlier this year, when Anthropic donated $20 million to Public First Action, a bipartisan super PAC network that’s backing Bores.
Legally, super PACs are not allowed to coordinate with candidates on things such as ad buys and messaging. But while it’s normal for companies to use super PACs to back candidates against other candidates, it’s rather innovative, perhaps, for companies to use super PACs to attack their corporate rivals (and the candidate is, in some ways, incidental). Now, Public First is synonymous with Anthropic and “doomerism” (in LTF’s terms), and LTF, as Bores put it, is now known as “the Marc Andreessen-Greg Brockman-Joe Lonsdale-backed Leading the Future super PAC.” And the beauty of non-coordination campaign finance laws is that Bores, the coauthor of the New York state RAISE Act, can plausibly distance himself from whatever Anthropic-funded political shenanigans are going on on his behalf. (Corporate money is corporate money.)
Dark money? More like dork money: We haven’t even gone into the shadier world of campaign finance vehicles, including one that might start firing on LTF in order to appease Trump. (Apparently, according to The New York Times, Leading the Future is too bipartisan to be trusted by Republicans.)
In March, a pro-AI, political advocacy messaging nonprofit called Innovation Council Action revealed itself to the public, run by Donald Trump’s former adviser Taylor Budowich and already boasting a $100 million war chest. Crucially, it received the “blessing” of a recurring Regulator character, David Sacks, former White House special adviser on AI and crypto. ICA will be focused explicitly on promoting Trump’s AI agenda, and that means addressing a new issue inside the Republican Party: populist-leaning candidates unwilling to cave to whatever pro-industry positions Donald Trump has been convinced to repeat at any given time.
(Who’s pushing this agenda? We currently do not know. ICA is known as a “dark money nonprofit,” which means that unlike super PACs, its donors do not legally have to be disclosed.)
Time to regulate prediction markets now!
The latest technology causing a meltdown in Congress is prediction markets, which currently exist in a regulatory no man’s land: Is trading on a prediction market gambling, or is it something else completely that deserves its own legislation? The Senate Commerce Committee is holding its first hearing on sports betting and prediction markets, and in a sign that the tech industry is really tech industry-ing, they’re sending in the big guns. Patrick McHenry, the former Republican chair of the House Financial Services Committee, who left Congress to join a16z and became a crypto lobbyist, will be testifying as a representative for a new industry advocacy group called the Coalition for Prediction Markets.
But what’s even more interesting is the growing coalitions of industries who really, really dislike prediction markets: the gaming industry (casinos and the like), the futures market, traditional sports betting, any sort of industry that thinks prediction markets threaten their business. It’s my first bet as to who’s behind FairPredicts, a “watchdog” group that’s launched a six-figure ad buy timed for this Senate hearing. The ads, which go up in Washington in metro stations and digital (as well as buses circling Capitol Hill — yes, really), are a direct parody of Kalshi’s giant green ads from earlier this year:
And speaking of strategic industry coalitions moving against Big Tech politics! The Clarity Act’s Senate Banking Committee markup last week sailed through surprisingly quickly, with two Democrats included in the 15–9 majority that approved it after roughly three hours of debate. The bill, which would create a financial framework around stablecoins, has already experienced a ton of drama: Coinbase dramatically revoked its support over interest yields, traditional banks had a meltdown in response, and all the while, the midterms have loomed in the background.
But the drama has yet to end, both procedurally and politically. There’s the reconciliation process, a Senate floor vote, the bill returning to the House, and whatever political shenanigans happen between then and now. And politically, a growing number of normally misaligned industry groups are echoing the banks in opposition to the Clarity Act, for a variety of reasons; the police unions think that it would prevent law enforcement from tracking money laundering, and the labor unions think it will drain workers’ pension funds. Once again, technology is making horseshoe theory happen!
Specifically, my recess. With any luck, politics and technology will not crash out at the intersection too aggressively while I’m out. But that might be a lot to ask for.