Vinod Khosla on-stage at Collision Conference in Toronto.
Legendary Silicon Valley investor Vinod Khosla attacked current Federal Trade Commission chair Lina Khan yesterday, saying she was not rational and should not be in her role. Khan, a associate professor at Columbia Law School, has been in her FTC position since 2021.
“She’s not a rational human being,” Khosla said onstage at Collision Conference in Toronto. “She doesn’t understand business: she shouldn’t be in that role.”
A possible rationale for the attack is that Khan has been vocal about enforcing government antitrust regulation over the past few years. In January of this year, the FTC began investigating the investments and partnerships of big tech: companies like Alphabet, Amazon, and Microsoft. Part of that is probing the acquisitions that the large tech conglomerates make to ensure that they don’t “fortify a monopoly or allow a dominant firm to take out a nascent threat,” she recently told TechCrunch.
That makes it harder for Apple, Google, Microsoft, and other big tech companies to acquire smaller companies, which makes it harder for investors like Khosla to realize profits on their sale.
Khosla co-founded Sun Microsystems and currently ranks at 161 on the Forbes 400 list of the richest Americans. He has invested in Juniper Networks, Instacart, DoorDash, Square, Impossible Foods, and many other companies.
While Khosla says he’s fine with regulation, including antitrust regulation, he believes it has gone too far.
“Antitrust is a good thing to have in any country, any economic system,” he said. “Antitrust over-enforced, or over-executed, is bad economic policy.”
The right amount of regulation, Khosla added, is essential to economic development, suggesting that Europe has regulated its way out of leading in “any technology area.”
The growing concern over the rise of big tech has been partly driven by financial results. In 2023, just seven tech stocks accounted for almost all of the stock market’s gains. Nvidia has joined these companies by virtue of its chips for AI, and it just unseated Microsoft as the world’s most valuable company. Right now, the U.S. market is more concentrated than it has been at any time since the 1960s, according to Morningstar, with the 10 biggest companies accounting for almost a third of all market capitalization and nearly 70% of all profits.
But Khosla says that level of concentration is necessary.
“I think we are in a massive techno-economic war with China for the best technology over the next 20 years,” he said. “And I think we need to make sure we do everything to win.”
Another reason: achieving the best possible AI technology.
“AI will cause great abundance, great GDP growth, great productivity growth ... all the things economists measure,” Khosla said.
Those assertions remain to be proven, of course. In addition, hyperbole aside, it’s pretty clear that a law professor and FTC chair is not irrational.
Which doesn’t mean there aren’t differing opinions on the most effective and fair path forward for both technology and business in the United States.