David Sacks Urges Y Combinator To Open Austin Office, Predicts City To Replace Silicon Valley As Tech Capital

David Sacks, the White House AI and crypto czar in President Donald Trump‘s administration, has made a compelling case for establishing a Y Combinator (YC) office in Austin, Texas, citing the city’s burgeoning tech ecosystem and the need for a more inclusive tech industry.

Y Combinator is a leading American startup accelerator and venture capital firm.

Sacks Pushes For YC Expansion To Austin

On Thursday, Sacks took to X to urge YC partner Garry Tan to reconsider the decision not to open a YC office in Austin. Sacks highlighted the rapid growth of the Austin startup scene and the potential for YC to play a pivotal role in its success.

“@garrytan I would urge you to reconsider this decision and open YC Austin,” Sacks wrote on X.

.@garrytan I would urge you to reconsider this decision and open YC Austin.

First, the data is looking in the rear view mirror. “Past performance does not guarantee future results,” as the saying goes. The Austin startup ecosystem is off to the races thanks to first movers like… https://t.co/m6fuTIBXxR

— David Sacks (@DavidSacks) January 1, 2026

Silicon Valley’s Network Effects Could Limit Growth

Sacks, a prominent Silicon Valley figure, also suggested that by not expanding to Austin, Y Combinator would be acknowledging that Silicon Valley’s network effects are insurmountable.

He argued that for the tech industry to thrive, support must reach beyond traditional hubs like Silicon Valley.

“If you don’t start diversifying now, you won’t have any leverage.”

See Also: Joe Rogan Defends Billionaires, Saying ‘They’re Working 16 Hours A Day.’ He Also Thinks Sharing The Wealth Would Make People Hate Them Less

In a subsequent X post, the former Chief Operating Officer of PayPal Holdings Inc. (NASDAQ:PYPL) also predicted that Miami would replace New York City as the finance capital, and Austin would supplant San Francisco as the tech capital in response to socialism.

As a response to socialism, Miami will replace NYC as the finance capital and Austin will replace SF as the tech capital.

— David Sacks (@DavidSacks) January 1, 2026

Billionaire Tax Fuels Tech Leaders’ Discontent In California

Sacks’ call for a more inclusive tech industry comes amid growing discontent among tech leaders in California.

The state’s proposed ‘Billionaire Tax’ has drawn criticism from industry leaders such as tech investor Peter Thiel, Google (NASDAQ:GOOG) (NASDAQ:GOOGL) co-founder Larry Page, and Sacks, who have suggested they might leave the state if the measure passes.

Other tech leaders, such as Galaxy Digital Inc. (NASDAQ:GLXY) CEO Mike Novogratz and Reddit Inc. (NYSE:RDDT) co-founder Alexis Ohanian, have also called for a federal debate on wealth inequality, suggesting a broader shift in the industry’s approach to these issues.

The power dynamics in the industry could drastically change if Austin turns out to be the new tech capital, as Sacks predicts.

Read Next: 

• Chamath Palihapitiya Warns California Wealth Tax Could Crush Startup Founders: ‘It Will Kill Entrepreneurship In California’

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.