Silicon Valley's power is no longer a certainty, and its collapse is no longer a pipe dream but a real possibility. That's the warning from Balaji Srinivasan, former Chief Technology Officer of Coinbase.
The former Coinbase executive argues that increasing political risks and major policy shifts could send Silicon Valley "from number one to zero" in the next decade, with crypto-based networks emerging as natural successors.
California's billionaire tax puts Silicon Valley on the electoral scale.
Srinivasan presented a scenario in which Silicon Valley's core economic engine, venture Capital , is at risk of being disrupted by:
- Taxing property
- Strictness from regulatory bodies, and
- Political pressure from both sides.
The central point in his argument is the California Billionaire Tax Act of 2026, which proposes a one-time increase of a special 5% tax on individuals with a net worth exceeding $1 billion.
“There is a scenario where Silicon Valley could actually go to zero in the next ten years,” Srinivasan wrote . “The replacements would be China and the Internet, specifically Chinese tech companies and internet-based crypto protocols, because they are politically protected in a way that Silicon Valley is not.”
Srinivasan argues that this tax directly impacts the "power law," which is the foundation of investment flows for startups. Venture Capital relies on the ability to generate huge profits from rare deals to offset numerous failed investments.
If there is no longer any prospect of becoming a billionaire, he believes the incentive system will collapse.
"If there's no hope of becoming a billionaire, there will be no angel investments, and without them, there will be no Silicon Valley," Srinivasan warned, adding that even the mere intention of using this measure is enough to curb risk-taking and early investments in startups.
Many law firms, such as Baker Botts, have pointed out major constitutional issues with this proposal. These concerns include violations of the Silent Trade Clause, retroactive effect, and unreasonable asset seizure.
Nevertheless, PwC estimates that this initiative could generate around $100 billion if passed by November 2026. This shows a growing political trend toward taxing wealth concentrated in the technology sector, despite legal uncertainties.
Political risk becomes a structural factor.
Besides the tax issue, Srinivasan argues that the threat is even greater as the political foundation on which tech companies rely is gradually eroding, much like an operating system slowly malfunctioning.
He pointed to growing uncertainties surrounding property rights, stock interests, visas, IPO pathways , and the tightening regulation of emerging technologies like AI and crypto.
The former Coinbase executive argues that the current opposition comes from both sides of the political spectrum. For some on the left, technology is a symbol of concentrated Capital flows and inequality; while for some on the right, it represents globalization and cultural upheaval.
According to Srinivasan, this dual pressure is causing the tech industry to become increasingly politically isolated.
While some founders have moved to Texas, Miami, Dubai, or Singapore, he cautioned that the vast majority of large companies remain deeply rooted in California, Delaware, and New York — places he called increasingly critical of the concentrated power of tech firms.
Crypto is like "mammals".
However, Srinivasan doesn't think technology will stop developing — rather, the era of Silicon Valley's monopoly will come to an end.
According to him, technology has been and continues to be dispersed. Hardware manufacturing is shifting back to China. Unicorn startups are present in more than 400 cities worldwide. Open-source AI models are reducing reliance on centralized workforce centers.
He argued that crypto is in a particularly favorable position to thrive in this environment. Unlike traditional companies , crypto protocols operate globally, are not dependent on any one country, and maintain their strength through decentralization.
Srinivasan likened the current situation to an extinction event. According to him, Silicon Valley is like the Longing —once powerful, yet now fragile.
Meanwhile, crypto networks and the internet are like mammals—small, undervalued, but structured to withstand political shocks.
As the proposed property tax in California approaches its 2026 vote, the question isn't whether technology will continue, but where and in what new forms it will evolve in its next chapter.
