The candidate that Silicon Valley built is now the one they want to tear down

The candidate that Silicon Valley built is now the one they want to tear down

For months, there was speak that Silicon Valley’s billionaire class was recruiting a candidate to tackle Representative Ro Khanna. Early Tuesday morning, that candidate made it official.

Ethan Agarwal (pictured above), a 40-year-old tech entrepreneur with no political background, told TechCrunch on Monday night that he is operating for California’s seventeenth congressional district. That course of is probably to arrange what could develop into one of the most lavishly funded major challenges of the 2026 cycle.

The race places a highlight on Khanna, a 49-year-old Democrat widely seen as a doable 2028 presidential candidate, who has publicly backed a one-time wealth tax in California. His endorsement has infuriated some of the state’s richest founders and buyers, however Khanna has doubled down, introducing national laws with Senator Bernie Sanders that would impose a 5% annual wealth tax on all Americans price $1 billion or more — a proposal their places of work estimate would increase $4.4 trillion over a decade.

There’s a sure irony to the state of affairs. Agarwal is a graduate of Wharton and spent three years at McKinsey before founding audio fitness company Aaptiv, which he bought in 2021. He most not too long ago co-founded monetary providers startup Coterie, backed by Andreessen Horowitz.

When Khanna first ran for this same seat in 2014, he was the tech-backed outsider, with tech names like Marc Andreessen, Sheryl Sandberg and Eric Schmidt supporting him. He challenged in style Democratic incumbent Mike Honda, misplaced that try, however got here again in 2016 to win.

Critics at the time called Khanna an owned man. A decade later, the same cost will certainly be leveled at the particular person making an attempt to unseat him.

What follows is an edited version of our dialog with Agarwal.

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TechCrunch: Last summer time, you announced plans to run for governor of California. Now you’re becoming a member of a congressional race instead. Why the change?

Agarwal: I made a decision to run for governor again in July when the subject was actually skinny. I don’t have a political background — I come from tech. But then a few strong candidates received in, including Matt Mahan, who I believe is actually strong. I’ve been monitoring Ro since his first congressional race in 2012 — I used to be a big supporter. But in the last couple of years, he’s been incrementally pivoting left, and when he tweeted assist for the wealth tax at the end of December, that was the straw that broke the camel’s again. I noticed I may have more impression operating in the seventeenth district and unseating Ro.

TC: Who is backing you financially?

Agarwal: We’re pulling papers tomorrow, so we don’t have a checking account yet and I can’t increase cash until then. That said — [Y Combinator CEO] Garry Tan is behind me, [DoorDash co-founder] Stanley Tang, and a number of others from the tech community whose names will come out in the coming days and weeks.

[Editor’s note: The involvement of Tan, Tang, and others will likely fuel a familiar line of attack: that Agarwal is less an independent candidate than a vehicle for billionaire grievances. It is worth noting that Khanna faced nearly identical criticism when he first ran, and was backed by much of the same tech-donor class that is now organizing against him.]

TC: Can you give me a bit more shade in your plan? Beyond closing loopholes, is there another to the billionaire tax?

Agarwal: One is taxing loans taken out against belongings. Very rich people will take a mortgage out against their holdings and pay low curiosity. Because it’s technically a mortgage, they don’t pay taxes on it. I believe it’s very affordable to tax those loans.

Second is capital beneficial properties — California’s price is presently 13.4% and I believe it’s affordable to take into account rising that. Third, a number of homes in California are owned by personal fairness corporations or people holding them as investments. I imagine you need to pay considerably increased property taxes on a house held as an funding than as a major residence. That would each increase income and ease strain on households who really live in what they personal.

[The loan-tax idea has been circulating in wealthy circles for some time — notably espoused by VC Chamath Palihapitiya, though it may trace back further to hedge fund giant Bill Ackman. The proposal would treat loans backed by stock holdings as taxable events, eliminating a longstanding strategy by which investors access their portfolio’s value without selling, and thus without ever paying capital gains taxes.]

TC: If you make it to Washington, what is going to your top three priorities be?

Agarwal: Number one, banning inventory buying and selling for members of Congress and their households. Number two, banning company PAC cash. Number three, time period limits.

[Earlier in the conversation, Agarwal spoke at length about the 5,000 children in the 17th district — the wealthiest congressional district in the country — living below the poverty line, and described making it “the first congressional district in history to completely eradicate childhood poverty” as one of his proposals. That point did not make the top three.]

TC: You’ve accused Ro Khanna of being a prolific inventory dealer. Can you clarify?

Agarwal: He’s been buying and selling more shares than any Democratic congressman in the historical past of the nation — in tobacco, oil and fuel, Big Pharma, big tech. He publicly launched a congressional inventory buying and selling ban, and then made 4,000 trades last yr. Even if the invoice didn’t cross, nothing is stopping him from imposing it on himself. In my case, I’m going to divest my total portfolio the first day I’m elected, so no one has to wonder if my votes mirror my private account or my precise beliefs.

[Both claims deserve scrutiny. Khanna has co-sponsored the TRUST in Congress Act and introduced reform resolutions calling for a ban, but hasn’t authored standalone legislation. On the trading figures, Khanna has repeatedly said that he does not personally own or trade any individual stocks, and that the trades in question belong to his wife, whose pre-marital assets are held in an independently managed trust — which, he noted, eliminates any conflict under Office of Government Ethics rules. Whether that distinction satisfies voters is a question the campaign will have to answer.]

TC: Should social media platforms be held accountable for harming teenagers? Section 230 of the Communications Decency Act presently shields them from legal responsibility for what customers publish. Where do you stand on altering that?

Agarwal: I believe Section 230, when it was first drafted [in 1996], made a number of sense. The aim was for platforms to serve mainly as internet hosting. But as they’ve advanced, they’re now figuring out what we see because of the algorithms they push. I don’t suppose it is sensible to make social media firms totally accountable for what people publish — the quantity is too high, and having a 3rd occasion make subjective determinations about what’s dangerous will get into actually harmful territory.

That said, I do suppose it’s price revisiting when it comes to long-term impacts on youngsters’ psychological health. If you speak to Meta, or X, or anybody, they’ll all say they don’t profit from hurting youngsters. We’re all aligned in not wanting that as an end result.

TC: What about regulating AI firms, many of which are actually in your yard?

Agarwal: I believe about it from a national safety perspective. I’m confident that having the most highly effective fashions is important for America, and if we don’t build them, China will beat us.

Some restrictions make sense — AI shouldn’t provide help to harm your self or another person. But I don’t suppose we ought to be limiting firms’ ability to build and strengthen these fashions. It’s actually important that we permit them to thrive, for national safety functions, if nothing else.

TC: Do you suppose we want one thing like an FDA for AI?

Agarwal: I’ve heard that thought. The FDA has largely performed a superb job of holding Americans healthy and secure — I belief the people who work there, which I can’t say for most authorities organizations. If there’s a manner to build an impartial, apolitical authority with rotating phrases, that is sensible to me. But I want to be sure it’s designed to strengthen America’s national safety, not for political functions.

TC: What about prediction markets — Polymarket, Kalshi? Do they want more regulation?

Agarwal: To be clear, Kalshi and Polymarket are each regulated by the CFTC. I believe a part of the downside is that sports activities betting apps have created a lot regulatory confusion about what’s allowed by which states that Polymarket and Kalshi have emerged as alternate options. But the regulation they have today is really fairly good.

TC: How are you planning to run this campaign? Are you doing this full time?

Agarwal: This is 110% of my life. I went to [the private San Jose, Ca., school] Harker, which is in the district. I’ve grown up close by. I do know a whole bunch, possibly hundreds of people who live there. My campaign is primarily a floor game — I’m going to Chinese and Hindi instructional colleges, to cultural occasions. Holi is arising; Chinese New Year, Purim, is on Tuesday. I’m going to be in any respect of it, assembly people, going to small companies.

I believe this is really the core distinction between Ro and me: he is constructing a national profile, and I’m completely tremendous with that if that’s what he desires to do. But he’s doing it while abandoning the people of his personal district. I’m not leaving California. I’m not utilizing this as a stepping stone. He’s national; I’m local. And I believe people in the seventeenth know they want somebody centered on them alone.

TC: What was the impetus to get into politics in the first place?

Agarwal: Maybe this is corny, however — my dad got here right here with completely nothing, making $14,000 a yr when he first arrived. He began a company, took it public, bought it. I used to be born on third base as a result of that. I’ve began two firms and bought them each.

And then I see people round me not benefiting from the same system that made all of that doable. The people listed here are hardworking, high potential — however the atmosphere isn’t supporting them anymore. I’ve been complaining about it for a very long time, and I felt prefer it was time to rise up and do one thing.

TC: Is this the start of a political profession?

Agarwal: This isn’t a profession pivot. I see a really particular downside in the seventeenth district that I want to remedy. I’m going to impose time period limits on myself — I received’t do more than 5 phrases — and then I’ll most likely return to the personal sector. Service ought to be a calling, not a job. And actually, I don’t suppose it serves your constituents properly when it turns into a profession. Even if a time period limits invoice doesn’t cross, I’m going to impose it on myself. That’s what I really imagine.

[That also echoes something from Khanna’s early campaigns — the outsider who arrives with no interest in becoming a career politician except a mandate from the tech industry to shake things up. Whether Agarwal gets further than Khanna’s first attempt did in 2014 may depend on whether Khanna develops any vulnerabilities of his own. Right now, introducing sweeping national legislation with Bernie Sanders and sitting on $15 million in campaign cash, he appears to be doing everything he can to ensure he doesn’t.]

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