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TechCrunch
27 minutes ago
- TechCrunch
David Sacks and the blurred lines of government service
When Vultron announced its $22 million funding round earlier this week, the AI startup made sure to highlight a key investor: Craft Ventures, the firm 'co-founded by White House AI adviser David Sacks.' The announcement has raised questions about conflicts of interest in the Trump administration, where Sacks serves as both AI and crypto czar while maintaining his role at Craft Ventures — an arrangement that critics see as a new model of government service where the lines between public duty and private gain have become unclear. Sacks has secured not one but two ethics waivers allowing him to shape federal policy while maintaining financial stakes in the very industries he oversees. The first, an 11-page document from March, covers his crypto investments. The second, issued in June, specifically addresses his AI holdings. Together, they've enabled what ethics experts call an unprecedented arrangement. 'This is graft,' said Kathleen Clark, a Washington University law professor specializing in government ethics, after reviewing Sacks' crypto waiver. 'This is a lawyer in the White House Counsel's office doing Trump's bidding, letting [Sacks] make money while insulating him from criminal liability.' Clark's analysis is critical. She notes the waiver discusses percentages of Sacks' total assets – when it was signed, his stake in Craft's overall portfolio represented less than 3.8% of his total assets, for example – but never reveals actual dollar amounts. 'The fact that this interest is just 3.8% of someone's total assets, that's something if you're talking about a law professor. But 3.8% of this guy's assets is a heck of a lot of money,' Clark said. Clark also argues that the waiver fails to consider any consideration of potential upside. Federal regulations require examining not just current value but 'potential profit or loss.' For a venture capitalist like Sacks, Clark notes, 'even if right now [if his shares are] less than 3.8% of his assets, if it does well, it could be more than that.' Craft Ventures did not respond to several requests from TechCrunch this week to discuss this story. Techcrunch event Tech and VC heavyweights join the Disrupt 2025 agenda Netflix, ElevenLabs, Wayve, Sequoia Capital — just a few of the heavy hitters joining the Disrupt 2025 agenda. They're here to deliver the insights that fuel startup growth and sharpen your edge. Don't miss the 20th anniversary of TechCrunch Disrupt, and a chance to learn from the top voices in tech — grab your ticket now and save up to $675 before prices rise. Tech and VC heavyweights join the Disrupt 2025 agenda Netflix, ElevenLabs, Wayve, Sequoia Capital — just a few of the heavy hitters joining the Disrupt 2025 agenda. They're here to deliver the insights that fuel startup growth and sharpen your edge. Don't miss the 20th anniversary of TechCrunch Disrupt, and a chance to learn from the top voices in tech — grab your ticket now and save up to $675 before prices rise. San Francisco | REGISTER NOW The Vultron investment The timing of Vultron's announcement illustrates the complexity. Vultron creates AI tools specifically for federal contractors, helping them win government contracts more efficiently. The company boasts of reducing proposal timelines 'from weeks to days' and claims one Fortune 500 client now saves 'more than 20 hours per user each week' on federal contracting work. A source close to the company says Craft Ventures' investment predates Sacks' government appointment. However, the timing raises questions: the nation's AI czar has a financial stake in a company that profits from helping businesses win the very federal contracts his policies will influence. Senator Elizabeth Warren has been among the most vocal critics of these arrangements. In a May letter to the Office of Government Ethics, the ranking member of the Senate Banking Committee questioned Sacks' crypto waiver, noting he was simultaneously 'co-hosting a $1.5 million-a-head dinner for crypto industry players' while shaping federal crypto policy. 'Mr. Sacks simultaneously leads a firm invested in crypto while guiding the nation's crypto policy,' Warren wrote. 'Normally, federal law would prohibit such an explicit conflict of interest.' Sacks has largely dismissed Warren's concerns, accusing her of having a 'pathological hatred for the crypto community.' He has separately said that he sold a fortune in crypto before joining the White House 'because I didn't want to even have the appearance of a conflict.' Indeed, supporters of Sacks point to the sacrifices he's made for government service. According to his waivers, he and Craft Ventures have divested over $200 million in digital assets, with at least $85 million directly attributable to him. He has sold stakes in fast-growing companies, including his position in Elon Musk's xAI, and initiated the sale of interests in approximately 90 venture capital funds, including Sequoia funds. The source close to Sacks emphasizes these divestments, noting that because of his government role, Craft Ventures must now run every AI and crypto-related deal past the White House ethics committee. This oversight, they suggest, makes it implausible to invest in feeder funds and smaller deals, given the volume of work that might entail for everyone involved. Clark argues that the underlying ethical framework remains flawed. The waivers themselves, she argues, are designed to provide legal cover rather than address ethical concerns. 'This is whitewashing,' she said. Complicating matters further, Sacks works as a government employee just 130 days per year – effectively every other week – while maintaining his commercial activities during off periods. In September, for example, Sacks and his co-hosts in their popular podcast, All In, will stage what has become an annual three-day conference to which attendees pay $7,500 per person to join. While legally permissible, these activities further blur the lines between his public and private roles. Some observers wonder whether Sacks – a self-made billionaire by Forbes' estimates – will declare victory and exit government service altogether. With the GENIUS Act now law, he may consider his primary mission accomplished: bringing cryptocurrency from the fringes to center stage. But that will likely take time. Sacks used a Fox News appearance yesterday to detail his immediate priorities following the act's passage, emphasizing the development of regulatory frameworks in three key areas, including defining market structure categories (securities versus commodities versus digital assets), expanding stablecoin regulations, and evaluating a potential national digital asset stockpile. Meanwhile, critics concerned about conflicts of interest argue the precedent has been set. The rapid passage of crypto-friendly legislation, combined with ongoing investments in AI companies serving the federal government, suggests that Sacks and others with similar arrangements have positioned themselves and their wider orbit to benefit from their government access. Whether this represents a new normal for Silicon Valley relations with Washington, or instead an aberration that future administrations will reverse, remains to be seen. What's clear is that traditional ethics frameworks may be inadequate for an era when venture capitalists can maintain their investment activities while simultaneously shaping the policies that determine those investments' future value. For now, the arrangement continues, protected by carefully crafted waivers that ethics experts have questioned but find legally unassailable. As Clark puts it: 'No one will be able to prosecute him.'
Yahoo
35 minutes ago
- Yahoo
Nvidia stock hit an all-time high this week. But could it be a bargain, even now?
With a market capitalisation north of $4.2trn, chip company Nvidia (NASDAQ: NVDA) might not seem like an obvious bargain at first glance. Nvidia stock sells for 56 times earnings. Again, that does not necessarily sound like a screaming bargain. But Nvidia is no ordinary stock. The company recently became the most valuable listed business in history. The Nvidia stock price has risen 1,602% over the past five years. That is the sort of performance that many stock market investors dream of. However, am I too late to the party? Or could buying Nvidia stock for my portfolio even now potentially turn out to be a bargain when looking back a few years from now? Dramatic business improvement One of the difficulties in valuing Nvidia, whether one sees it as too pricy or a bargain, is the speed at which its business has grown in recent years. Last year, for example, revenues were $131trn. Five years before, they had been $11trn. Could it be that this is an exponential growth machine, so that even the current revenues might look comparatively small a few years from now? Or might it be that the recent years have seen a one-off boom in AI-led chip demand? And once that demand is fulfilled, will it fall away meaning Nvidia's revenues start getting much smaller? The answer to that question is critical, I reckon. If revenues fall significantly, earnings almost definitely will too. If earnings fall, the current Nvidia stock price could be too pricy. However, while revenue growth over the past five years has been incredible, earnings have been growing even faster. Last year's net income of $73bn compared to $3bn five years before. If AI heralds a permanent shift in chip demand and we are only in the early stages, that could be brilliant news for Nvidia. Economies of scale could mean that earnings growth outpace revenue growth, as happened in recent years. In that case, the current Nvidia stock price could yet turn out to be a bargain. Risky, but potentially rewarding What will happen? We do not know. What is clear, however, is that Nvidia has significant strengths that could help it keep doing well if chip demand remains buoyant. They include proprietary chip designs, a world-class workforce, strong brand, and established relationships with a large roster of existing clients. Those things all strike me as strengths and help explain why, at the right valuation, I would certainly be happy to add Nvidia to my portfolio. The question I wrestle with is whether the current valuation feels right to me. It does not, which is why I will not be adding Nvidia stock to my portfolio for now. For the reasons I outlined above, I see a strong case for the share to keep soaring in coming years. But that largely depends on the outlook for chip demand. That remains uncertain. Tariff disputes and growing competition could also eat into Nvidia's profitability. I do not think those risks are properly reflected in the current share price. The post Nvidia stock hit an all-time high this week. But could it be a bargain, even now? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool C Ruane has no position in any of the shares mentioned. The Motley Fool UK has recommended Nvidia. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Sign in to access your portfolio
Yahoo
an hour ago
- Yahoo
Will Nvidia Reach a $5 Trillion Market Cap in 2025?
Key Points Nvidia recently reached the milestone of $4 trillion in market value -- something no other company has ever done. The stock has soared thanks to Nvidia's strength in the artificial intelligence market. 10 stocks we like better than Nvidia › Nvidia (NASDAQ: NVDA) has already reached a couple of huge milestones this year. It became the world's biggest company and reached a market value that no other company has ever attained: $4 trillion. To do this, the tech powerhouse had to surpass tech giants Apple and Microsoft, which had long reigned as the top two by market value The rise in market cap (share price multiplied by number of shares) happened thanks to Nvidia's dominance in what may be today's highest-potential investment area: artificial intelligence (AI). Nvidia designs the world's most sought-after AI chips -- called graphics processing units (GPUs) -- and these and other products have helped the company's earnings skyrocket. Investors have appreciated this and piled into the shares, and as a result, Nvidia's market value also has roared higher. But $4 trillion isn't the limit for Nvidia, and investors already are wondering when this supercharged company will reach $5 trillion in market value. Can it happen this year? Nvidia's path to $4 trillion Before diving in, let's trace Nvidia's path to $4 trillion. Nvidia has seen its market capitalization surge in a short period of time, advancing from less than $1 trillion back in June 2023. Around that time, Apple and Microsoft outpaced Nvidia by far, as you can see in the chart below. But as the AI boom accelerated, so did Nvidia's revenue and investor interest in the stock, and that's helped Nvidia jump ahead of these tech giants. They, too, are present in the AI space, but Nvidia plays the key role and has benefited the most from this technology so far. For example, in the latest fiscal year, Nvidia's revenue climbed in the triple digits to more than $130 billion as customers rushed to get in on its chips and related products and services. There's reason to be optimistic this momentum will last because Nvidia has built an empire of AI offerings to cater to all of its customers' wishes, and with its deep knowledge of the field, Nvidia is able to envision and design the best products and services of tomorrow. On top of this, Nvidia has made a concrete promise to update its GPUs on an annual basis, adding to efficiency every time. This is key because the faster a user can train an AI model, for example, the lower the cost of the effort over the long run. The road to $5 trillion All of this tells us Nvidia's past, present, and future are bright. But what does this mean for market value in the months to come? Now, let's consider the road to $5 trillion. Today, Nvidia stock trades for about $171 and has a market cap of roughly $4.2 trillion. A jump from $4.2 trillion to $5 trillion would be about 20%. I think a 20% jump in the stock price (and thus the market cap) would be very easy for Nvidia to accomplish over a period of a few months. Such a move would increase Nvidia's trailing 12-month price-to-earnings ratio from about 55 today to 66. That's considering a trailing-12-month earnings-per-share of $3.10. Valuation would be higher than it is right now, but not ridiculous for a high-quality growth stock. All of this means that from a technical standpoint, Nvidia clearly could reach $5 trillion in 2025, and it could do so without pushing valuation to extreme levels. So, should investors count on Nvidia reaching this milestone this year? It's impossible to predict what a stock or the market will do over a period of a few months. Unexpected situations may arise, and they could impact a stock's performance. A perfect example is President Donald Trump's announcement this spring of his import tariff plan, a move that temporarily hurt stocks. It's important to keep that in mind when investing, and focus on the long term. But, from the information we know now, I can say the following. It's very possible that Nvidia, thanks to its outsize growth and solid prospects, may not only continue as the world's biggest company in 2025, but the AI behemoth also could reach the next milestone of $5 trillion in market value in the next 5.5 months. Should you buy stock in Nvidia right now? Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $687,149!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,060,406!* Now, it's worth noting Stock Advisor's total average return is 1,069% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 2025 Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. 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. Will Nvidia Reach a $5 Trillion Market Cap in 2025? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
