Ro Khanna on Silicon Valley’s Wealth, AI’s Risks, and the Fight for Economic Reform
In a wide-ranging conversation, economist Paul Krugman sat down with Representative Ro Khanna to unpack a contradiction at the heart of the US economy. Khanna’s district encompasses some of the most valuable companies ever created — Apple, Google, Nvidia,Broadcom and Tesla — firms that together account for trillions of dollars in market value. Yet within a short drive of their campuses are families struggling to afford rent, childcare, and healthcare. The story of Silicon Valley, Khanna argues, is not only about world-changing innovation, but about who shares in its rewards.
The popular image of the Valley is one of hoodie-clad billionaires and limitless upside. Khanna insists that caricature obscures a more complicated reality. For every founder worth billions, there are far more middle-class and working-class residents squeezed by housing costs and rising living expenses. Even inside the tech giants, many engineers are conflicted — proud of the products they build, yet uneasy about inequality, algorithmic harms, and the social consequences of scale. Earlier generations of tech leaders, he suggests, were more closely tied to local communities and more conscious of the public investments that underwrote their success.
That shift, Khanna contends, is personified by a cohort often labelled the “PayPal Mafia”, including Elon MuskDealroom has a profile for this one. Try Dealroom →,Peter ThielDealroom has a profile for this one. Try Dealroom →, and Reid HoffmanDealroom has a profile for this one. Try Dealroom →. In his telling, some of these figures do not simply favour deregulation; they advance a more sweeping belief that a small circle of elite innovators is better equipped to allocate capital — and perhaps to steer society — than democratic institutions. That outlook, he argues, colours debates over cryptoassets, artificial intelligence, and the proper scope of government, recasting wealth concentration as evidence of merit rather than a warning sign.
Artificial intelligence is where these tensions crystallise. Khanna describes himself as an “AI democrat”, neither intent on throttling innovation nor willing to allow it to proceed without guardrails. He sees vast potential in medicine, energy, and productivity. At the same time, he warns of entry-level roles disappearing, tax incentives skewed toward automation, and gains accruing disproportionately to shareholders. His proposed response is structural: revise incentives that reward replacing workers, ensure humans remain in the loop in sensitive sectors, and consider large-scale public investment in care, science, and infrastructure to buffer disruption.
Housing and wealth concentration complete the frame. California’s affordability crisis, Khanna argues, poses a deeper threat to social cohesion than any exodus of tech talent. He supports expanded homebuilding, federal incentives for zoning reform, and, in distorted markets, forms of rent stabilisation. He also backs higher taxes on billionaires to fund childcare, healthcare, and education, alongside measures to curb the political influence of large donors. For Democrats, he maintains, opposing Donald Trump is necessary but insufficient; the larger task is to reshape the economic model so that innovation and broad-based prosperity advance together, and more Americans feel they have a tangible stake in growth.
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