Silicon Valley's Fallen Star: Why They're Turning on Their Own

For months, whispers have circulated that Silicon Valley’s billionaire class was actively seeking a candidate to challenge Representative Ro Khanna. Early Tuesday morning, that candidate officially entered the race. Ethan Agarwal, a 40-year-old tech entrepreneur with no prior political experience, announced to GearTech on Monday evening his candidacy for California’s 17th congressional district. This move is poised to ignite what could become one of the most financially robust primary challenges of the 2026 election cycle, signaling a significant shift in the power dynamics within the tech industry and its relationship with established political figures.

The Rising Tensions: A Wealth Tax at the Heart of the Conflict

The contest shines a spotlight on Khanna, a 49-year-old Democrat widely considered a potential 2028 presidential contender. He has publicly advocated for a one-time wealth tax in California, a position that has deeply angered some of the state’s wealthiest founders and investors. Khanna hasn’t backed down, even co-introducing national legislation with Senator Bernie Sanders proposing a 5% annual wealth tax on Americans with a net worth exceeding $1 billion – a measure their offices estimate would generate $4.4 trillion over a decade. This bold stance has become the catalyst for a direct challenge to his authority.

The irony is palpable. Agarwal, a Wharton graduate and former McKinsey consultant, founded the audio fitness company Aaptiv, which he sold in 2021. More recently, he co-founded Coterie, a financial services startup backed by Andreessen Horowitz. This background positions him as a quintessential Silicon Valley figure, yet he now stands as the face of opposition against a politician once championed by the very same community.

Interestingly, Khanna himself was once the tech-backed outsider. In his initial run for this seat in 2014, he received support from prominent tech figures like Marc Andreessen, Sheryl Sandberg, and Eric Schmidt. He lost that first attempt but successfully campaigned in 2016. Now, a decade later, the same accusations of being beholden to powerful interests are being leveled against his challenger.

Ethan Agarwal: A Shift from Gubernatorial Ambitions to Congressional Challenge

GearTech recently spoke with Agarwal to delve deeper into his motivations and plans. Here’s an edited version of that conversation:

From Governor to Congress: Why the Change?

GearTech: Last summer, you announced plans to run for governor of California. Now you’re joining a congressional race instead. Why the switch?

Agarwal: I initially decided to run for governor in July when the field was relatively open. My background is in tech, not politics. However, several strong candidates emerged, including Matt Mahan, whom I respect. I’ve been following Ro Khanna’s career since 2012 and was initially a supporter. But over the past couple of years, he’s progressively moved left. His endorsement of the wealth tax in December was the turning point. I realized I could have a greater impact by challenging him directly in the 17th district.

The Backers: Who's Funding the Challenge?

GearTech: Who is backing you financially?

Agarwal: We’re officially filing our paperwork tomorrow, so we don’t have a bank account established yet, and fundraising can’t begin until then. However, Y Combinator CEO Garry Tan, DoorDash co-founder Stanley Tang, and numerous others from the tech community are already committed to supporting the campaign. Their names will be publicly announced in the coming days and weeks.

[Editor’s note: The involvement of Tan, Tang, and others will likely reinforce the narrative that Agarwal is less an independent candidate and more a proxy for billionaire discontent. It’s worth remembering that Khanna faced similar criticism during his first campaign, backed by a comparable tech-donor class that is now actively opposing him.]

Beyond the Wealth Tax: Alternative Solutions

GearTech: Can you elaborate on your plan? Beyond addressing loopholes, is there an alternative to the billionaire tax?

Agarwal: One approach is to tax loans taken out against assets. Wealthy individuals often borrow against their holdings at low interest rates, avoiding taxes on the borrowed amount. I believe taxing these loans is reasonable. Secondly, California’s capital gains rate is currently 13.4%, and increasing that should be considered. Finally, many California homes are owned by private equity firms or held as investments. I propose significantly higher property taxes on investment properties compared to primary residences. This would generate revenue and alleviate pressure on families who actually live in their homes.

[The loan-tax idea has gained traction in affluent circles, notably championed by VC Chamath Palihapitiya, though its origins may extend further back to hedge fund manager Bill Ackman. The proposal would treat loans secured by stock holdings as taxable events, eliminating a long-standing strategy for investors to access portfolio value without triggering capital gains taxes.]

Priorities in Washington: A Three-Pronged Approach

GearTech: If you reach Washington, what will be your top three priorities?

Agarwal: First, banning stock trading for members of Congress and their families. Second, prohibiting corporate PAC money. Third, implementing term limits. These are fundamental reforms needed to restore trust and accountability in government.

[Earlier in the conversation, Agarwal highlighted the fact that 5,000 children in the 17th district – the wealthiest in the country – live below the poverty line, and expressed a goal of making it “the first congressional district in history to completely eradicate childhood poverty.” However, this did not make his top three priorities.]

Scrutinizing the Claims: Stock Trading and Ethical Concerns

GearTech: You’ve accused Ro Khanna of being a frequent stock trader. Can you explain?

Agarwal: He’s engaged in more stock trading than any Democratic congressman in history – in tobacco, oil and gas, Big Pharma, and big tech. He publicly introduced a congressional stock trading ban, yet made 4,000 trades last year. Even if the bill failed to pass, he could voluntarily adhere to its principles.

I intend to divest my entire portfolio on my first day in office, eliminating any question of whether my votes reflect my personal investments or my genuine beliefs.

[Both claims warrant careful examination. Khanna has co-sponsored the TRUST in Congress Act and introduced reform resolutions advocating for a ban, but hasn’t authored standalone legislation. Regarding the trading figures, Khanna maintains that he doesn’t personally own or trade individual stocks, and the trades in question belong to his wife, whose pre-marital assets are held in an independently managed trust – which, he argues, eliminates any conflict under Office of Government Ethics rules. Whether voters accept this distinction remains to be seen.]

Navigating the Complexities of Tech Regulation

Social Media and Teen Mental Health: Section 230 Revisited

GearTech: Should social media platforms be held responsible for harming teens? Section 230 of the Communications Decency Act currently shields them from liability for user-generated content. Where do you stand on changing that?

Agarwal: Section 230, as originally drafted in 1996, made sense. The intention was for platforms to function as hosting providers. However, their evolution has led them to curate content through algorithms. While I don’t believe holding social media companies entirely liable for all user posts is feasible – the volume is too high, and subjective determinations of harm are dangerous – revisiting the law in relation to the long-term impact on teenagers’ mental health is worthwhile. We all agree that harming teenagers is undesirable.

AI Regulation: Balancing Innovation and National Security

GearTech: What about regulating AI companies, many of which are located in your backyard?

Agarwal: I view this primarily from a national security perspective. Maintaining American leadership in AI is critical, and we must avoid falling behind China. Some restrictions are sensible – AI shouldn’t be used to cause harm. However, we shouldn’t stifle companies’ ability to develop and strengthen these models. National security must be paramount.

GearTech: Do you think we need something like an FDA for AI?

Agarwal: I’ve heard that idea. The FDA has generally been effective in ensuring the safety of food and drugs – I trust the professionals who work there, which isn’t always the case with government organizations. If we can establish an independent, non-partisan authority with rotating terms, it could be beneficial. But it must be designed to bolster American national security, not serve political agendas.

Prediction Markets: Regulation and Clarity

GearTech: What about prediction markets – Polymarket, Kalshi? Do they need more regulation?

Agarwal: Kalshi and Polymarket are already regulated by the CFTC. Part of the issue is the confusion created by sports betting apps regarding what’s permissible in different states, leading to the emergence of these alternative platforms. However, the current level of regulation is actually quite good.

A Ground Game Strategy: Connecting with the Community

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

Agarwal: This is my sole focus. I grew up in the district, attending Harker in San Jose. I know hundreds, perhaps thousands, of residents. My campaign will be a ground game – I’ll be attending Chinese and Hindi schools, cultural events, and local businesses. Holi is approaching, as is Chinese New Year and Purim. I’ll be present at all of these, engaging with the community.

This is the core difference between Ro and me: he’s building a national profile, which is fine if that’s his goal. But he’s doing so while neglecting the people of his district. I’m not leaving California. I’m not using this as a stepping stone. He’s focused nationally; I’m focused locally. And I believe the residents of the 17th district need someone dedicated solely to their needs.

A Calling, Not a Career: A Commitment to Service

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

Agarwal: Perhaps it sounds cliché, but my father came here with nothing, earning $14,000 a year initially. He started a company, took it public, and sold it. I benefited from that success. Now, I see others no longer benefiting from the same system that enabled my family’s prosperity. The people here are hardworking and have potential, but the environment isn’t supporting them. I’ve been voicing these concerns for a long time, and I felt compelled to take action.

GearTech: Is this the start of a political career?

Agarwal: This isn’t a career pivot. I’m focused on solving a specific problem in the 17th district. I’ll impose term limits on myself – no more than five terms – and then likely return to the private sector. Service should be a calling, not a job. And honestly, I don’t believe it serves your constituents well when it becomes a career. Even if a term limits bill doesn’t pass, I’ll adhere to that principle myself.

[This echoes Khanna’s early campaigns – the outsider arriving with no ambition for a political career, driven by a mandate from the tech industry to disrupt the status quo. Whether Agarwal achieves the same success as Khanna’s initial 2014 run remains to be seen. Currently, with $15 million in campaign funds and a national profile, Khanna appears determined to avoid any vulnerabilities.]