One of the hottest topics in the tech sector is a proposed wealth tax in California aimed at billionaires, and the debate is yielding some insights into how they live.
While Nvidia CEO Jensen Huang said he’s “perfectly fine” with it, many others aren’t, including LinkedIn cofounder and major Democratic donor Reid Hoffman, who called it “horrendous” for innovation. Meanwhile venture capitalist Peter Thiel as well as Google cofounders Larry Page and Sergey Brin have already taken steps to sever ties with the Golden State just in case it qualifies for the November ballot and passes.
The proposal calls for California residents worth more than $1 billion to pay a one-time tax equivalent to 5% of their assets. The payment can be made over five years. The union pushing the measure, the Service Employees International Union-United Healthcare Workers West, has estimated the wealth tax could raise $100 billion in revenue and help offset federal cuts to health spending.
But one tech investor offered alternatives while acknowledging a massive loophole that the rich use to get around paying income taxes.
During a recent episode of the All-In podcast, cohost David Friedberg characterized the potential ballot initiative as more of an asset seizure—one that could be renewed beyond a year and set a precedent for similar ones elsewhere.
“It’s totally reasonable to say that billionaires aren’t paying their fair share of taxes, and it’s totally reasonable to say that ultra-high net worth people aren’t paying their fair share of taxes,” he said. “They pay an income tax. But the truth is a lot of ultra wealthy people borrow money against their assets and live off of that borrowed money. So they never have to pay taxes by selling the stuff that they own.”
Friedberg described the “buy, borrow, die” strategy of avoiding income taxes by living on debt that doesn’t get paid off until after the borrower dies. Then the heirs settle any outstanding loans by selling the deceased’s assets, and the gains that piled up during their lifetime aren’t subject to taxation.
In Friedberg’s view, it’s this practice that the proposed wealth tax for California is really trying to tackle.
“There’s a simple way to address it, which is to charge them a capital gains tax if they borrow against their assets that they haven’t paid capital gains tax on,” he added. “Very simple. That can resolve this.”
Another way to approach the issue would be to raise the capital gains tax, Friedberg said, though he doesn’t personally support doing that.
Those levies apply when assets like real estate or stocks are sold, but he explained that hiking them instead of relying on a wealth tax would make it function more like an income tax.
A group of California billionaires are also arguing about the wealth tax on a Signal chat, according to the Wall Street Journal. In that running back-and-forth, other alternatives that have come up include giving the government illiquid stock as a zero- or low-interest loan for a certain number of years and taxing stock that’s already public.
Opponents of the tax have warned about the impact it could have on economic growth and startups, while supporters point to the AI boom and say California’s ultra-rich would still be among the world’s wealthiest, sources told the Journal.
The tax has also split California’s Democratic lawmakers. Gov. Gavin Newsom is against it, while U.S. Rep. Ro Khanna is for it. But even the congressman has conceded the language needs some work and doesn’t want illiquid stakes or voting shares to be taxed.
Newsom told The New York Times on Tuesday that he was relentlessly working behind the scenes against the proposal, and he would continue to oppose it, even if it reached the November ballot.
Palmer Luckey, cofounder of defense tech startup Anduril, has said the tax would force founders to sell big pieces of their companies if privately held shares, which are commonly used as compensation in startups that aren’t yet profitable, grow in value.
Meanwhile, Y Combinator CEO Garry Tan recently warned that a provision in the ballot measure would value voting shares as equivalent to ownership stakes, putting holders on the hook for a much higher tax bill.
“This means if a founder holds shares representing only 3% of economic interest but 30% of voting control (through Class B supervoting shares), the tax would presume their ownership stake is at least 30% for valuation purposes, not 3%,” he said in a post on X on Friday. “The wealth tax is poorly defined and designed to drive tech innovation out of California.”
Anthropic has launched Claude Cowor, a general-purpose AI agent that can manipulate, read, and analyze files on a user’s computer, as well as create new files. The tool is currently available as a “research preview” only to Max subscribers on $100 or $200 per month plans.
The tool, which the company describes as “Claude Code for the rest of your work,” leverages the abilities of Anthropic’s popular Claude Code software development assistant but is designed for non-technical users as opposed to programmers.
Many have pointed out that Claude Code is already more of a general-use agent than a developer-specific tool. It is capable of spinning up apps that perform functions for users across other software. But non-developers have been put off by Claude Code’s name and also the fact that Claude Code needs to be used with a coding-specific interface.
Some of the use cases Anthropic showcased for Claude Cowork include reorganizing downloads, turning receipt screenshots into expense spreadsheets, and producing first drafts from notes across a user’s desktop. Anthropic has described the tool, which can work autonomously, as “less like a back-and-forth and more like leaving messages for a coworker.”
Anthropic reportedly built Cowork in approximately a week and a half, largely using Claude Code itself, according to the head of Claude Code, Boris Cherny.
“This is a general agent that looks well positioned to bring the wildly powerful capabilities of Claude Code to a wider audience,” Simon Willison, a UK-based programmer, wrote of the tool. “I would be very surprised if Gemini and OpenAI don’t follow suit with their own offerings in this category.”
Enterprise AI race
With Cowork, Anthropic is now competing more directly with tools like Microsoft’s Copilot for the enterprise productivity market. The company’s strategy of starting with a developer-focused agent and then making it accessible to everyone else could give it an edge, as Cowork will inherit the already-proven capabilities of Claude Code rather than being built as a consumer assistant from scratch. This approach could make Anthropic—which is already reportedly outpacing rival OpenAI in enterprise adoption—an increasingly attractive option for businesses looking for AI tools that can handle work autonomously.
Like any other AI agent, Claude Cowork comes with security risks, particularly around “prompt injections,” where attackers trick LLMs into changing course by inserting malicious, hidden instructions into webpages, images, links, or any content found on the open web. Anthropic addressed the issue directly in the announcement, warning users about the risks and offering advice such as limiting access to trusted sites when using the Claude in Chrome extension.
The company, however, acknowledged the tool was still vulnerable to these attacks, despite Anthropic’s defenses: “We’ve built sophisticated defenses against prompt injections, but agent safety—that is, the task of securing Claude’s real-world actions—is still an active area of development in the industry…We recommend taking precautions, particularly while you learn how it works.”
The launch has also sparked concern among startup founders about the competitive threat posed by major AI labs bundling agent capabilities into their core products. Cowork’s ability to handle file organization, document generation, and data extraction overlaps with dozens of AI startups that have raised funding to solve these specific problems.
For startups building applications on top of models from major AI companies, the concern about foundational AI labs building a similar functionality as part of their base product is a common one. In response to these concerns, many startups have argued that companies with deep domain expertise or a better user experience for specific workflows may still maintain defensible positions in the market.
Good morning. CFO confidence is on the upswing as 2026 begins, and digital transformation in finance has overtaken enterprise risk management as the top goal for the year ahead.
That’s a key finding of Deloitte’s latest CFO Signals Spotlight report, released this morning. Half of the finance chiefs surveyed named digital transformation as their foremost priority for 2026, followed by cash management optimization and capital allocation. The findings are based on a recent Q4 survey of 200 CFOs across industries at North American companies with at least $1 billion in annual revenue.
Steve Gallucci, global and U.S. leader of Deloitte’s CFO Program, told me the shift reflects how finance leaders are moving from exploration to execution when it comes to technology—particularly AI.
“Efficiency and productivity are certainly part of the equation,” Gallucci said. “But more broadly, we’ve been on this digital evolution for some time.”
In recent years, as advanced technologies like agentic AI burst onto the scene, boards and C-suite leaders have shown increasing interest. Finance chiefs took a cautious approach to implementing these tools. Deloitte’s Finance Trends report finds that finance leaders are now influencing enterprise strategy, driving cost optimization, advancing digital transformation, and building tech-enabled teams.
Last year, many companies focused on testing, creating use cases, and developing comfort with AI, Gallucci noted. But according to the Q4 survey, 87% of CFOs said AI will be extremely or very important to how their finance departments operate in 2026.
“What we’re seeing in some of the answers to the Q4 survey questions is that continued evolution,” Gallucci said. Finance leaders are taking a more deliberate, enterprise-wide approach to transformation and AI is accelerating that commitment, he added.
The report outlines six key areas CFOs plan to prioritize this year: Leveraging digital tools to transform finance operations; going all in on AI; embedding AI agents directly into finance workflows; keeping close watch on changes in buyer behavior; tapping internal talent to manage costs; and exploring more deal-making opportunities.
CFOs also appear focused on redeploying existing finance talent to work alongside AI-driven systems. About half of respondents said their organizations plan to hire or promote internally to help keep worker costs in line for 2026.
As CFOs and finance leaders lean into digital transformation, there’s an expectation that they’re going to have to reskill their existing talent, Gallucci said.
“We’re not seeing a decline in the number of finance professionals as a result of investments in technology and AI,” he said. But as leaders look to the future—both in finance and across the broader enterprise—they are increasingly focused on boosting productivity through technology and combining those tools with the skills of their existing workforce and an agentic digital workforce, he explained.
Competition and consumer dynamics add pressure
While technology transformation tops the agenda, competitive pressure remains a driving force. About half of CFOs cited rising competition as having the biggest impact on their companies, followed closely by shifts in customer behavior and demographics.
Competitive pressures are always near the top of CFOs’ minds, Gallucci said. But what’s different now is how they’re responding—looking across industries to see how others are using AI and digital tools, and applying those lessons quickly, he said.
Gallucci also pointed to evolving consumer demand as a key factor to watch, particularly as major banks and retailers release their fourth-quarter earnings.
There’s evidence of a K-shaped economy, he added. “CFOs are paying close attention to what that means for growth, pricing, and investment strategy.”
Clare Kennedy was appointed CFO of Spencer Stuart, a global advisory firm, effective Jan. 12. Kennedy succeeds Christine Laurens as part of a planned succession and in support of Laurens’ retirement from full-time executive work. Kennedy, who is based in London, joins Spencer Stuart from Maples Group, an international advisory firm, where she served as global chief operating officer. She joined Maples Group from Freshfields, an international law firm, where she served as its global CFO. Kennedy previously spent 18 years at Linklaters, an international law firm, where she held a variety of senior finance and commercial leadership roles. She began her career at Arthur Andersen and EY as a chartered accountant, specializing in tax.
Gillian Munson was appointed CFO of Duolingo, Inc. (NASDAQ: DUOL), a mobile learning platform, effective Feb. 23. Matt Skaruppa will step down after nearly six years with the company; he will remain CFO until Munson starts her new role, at which time he will assume an advisory role. Munson assumes the CFO role after serving on the Duolingo board of directors since 2019 as chair of the audit, risk and compliance committee. She was most recently the CFO of Vimeo and previously held CFO positions at Iora Health, Inc. and XO Group Inc.
Big Deal
A joint statement on Monday from tech giants Apple and Google announced that they have entered into a multi-year collaboration under which the next generation of Apple Foundation Models will be based on Google’s Gemini models and cloud technology. These models are said to power future Apple Intelligence features, including a more personalized Siri coming this year.
The tech giants stated: “After careful evaluation, Apple determined that Google’s AI technology provides the most capable foundation for Apple Foundation Models and is excited about the innovative new experiences it will unlock for Apple users. Apple Intelligence will continue to run on Apple devices and Private Cloud Compute, while maintaining Apple’s industry-leading privacy standards.”
Google and others took the early lead in the AI race, while Apple’s iPhone has lagged rivals on some AI features. Following earlier AI missteps, the Cupertino, Calif.-based company acknowledged last year that a major Siri upgrade would not arrive until sometime in 2026.
“This is what the Street has been waiting for with the elephant in the room for Cupertino revolving around its invisible AI strategy, but we believe this is an incremental positive to both AAPL and GOOGL,” Wedbush Securities analysts wrote in a Monday note on the Apple–Google partnership. Wedbush maintains an Outperform rating on Apple and continues to target a $350 price for the stock.
Going deeper
“Trump threatens to keep ‘too cute’ Exxon out of Venezuela after CEO provides reality check on ‘uninvestable’ industry” is a Fortune article by Jordan Blum.
Blum writes: “As other oil executives lavished President Trump with praise at the White House, Exxon Mobil CEO Darren Woods bluntly said the Venezuelan oil industry is currently ‘uninvestable,’ and that major reforms are required before even considering committing the many billions of dollars required to revitalize the country’s dilapidated crude business. Read the complete article here.
Overheard
“Buying a movie studio is hardly buying secure, hard assets.”
—Jeffrey Sonnenfeld, Yale professor and founder of the Yale Chief Executive Leadership Institute, and Stephen Henriques, a senior research fellow, write in a Fortune opinion piece titled “A Cautionary Hollywood Tale: The Ellisons’ Lose-Lose Paramount Positioning” regarding the multiple bids for Warner Bros. Discovery.
The Oval Office’s plan to force the Fed into submission is unlikely to work, Wall Street believes. In fact, they fear it may backfire so spectacularly that interest rate cuts which would have happened under Powell will be nixed as the central bank asserts its independence.
Over the weekend, Fed chairman Jerome Powell confirmed the Department of Justice had served the Federal Reserve with grand jury subpoenas relating to his Senate Banking Testimony on the renovation of Fed buildings.
It was a move that realists may have seen coming—after all, Trump has already levelled legal threats against other members of the rate-setting Federal Open Market Committee (FOMC)—but is unprecedented nonetheless. It comes after a year of lobbying by Trump, who wants the FOMC to cut the base rate to foster economic activity and reduce borrowing costs, regardless of the inflation risk.
However, Trump may not have banked on the fact that the FOMC (even under a new Fed chair this year) might want to make a point of that independence, and go to lengths to demonstrate it. As UBS’s Paul Donovan told clients this morning: “Any nominee from U.S. President Trump is likely to have to place additional emphasis on their independence to try and prove they are above politics. This might impact future policy decisions.”
As Bernard Yaros, lead U.S. economist for Oxford Economics, observed in a note yesterday: “The criminal investigation … could even backfire by making officials more reluctant to cut rates in the coming months and years.”
But there’s also another unexpected fallout which Trump is unlikely to enjoy: Powell may choose to stay on as a bastion of independence after a new Fed chairman is nominated. While his time as Fed chairman expires this year, his term on the Board of Governors does not expire until 2028. “If Powell was looking for a reason to stay on as a Governor … this could be one,” noted Deutsche Bank’s Jim Reid this morning. “It’s very unusual to stay on but [former Fed Chairman Marriner] Eccles did so in 1948 for 3.5 years to help protect and secure Fed independence after the Treasury were trying to fund large post war time debts.”
An unpopular plan
Investors might have hoped Trump had learned his lesson when it came to meddling with the Fed: When he threatened to fire Powell earlier this year, markets shifted uneasily, and the Republican president was forced into a swift U-turn.
According to reports, the action taken this week hasn’t been hugely popular within the White House. Axios reported today, citing two anonymous sources, that Treasury Secretary Scott Bessent told the president that the investigation “made a mess,” which could be bad for financial markets.
Even if the chips fall in favor of President Trump and he successfully ousts both Powell and Governor Lisa Cook, as well as managing to insert a dovish Fed chairman at the head of the table, there’s still an economic fallout to be dealt with. This could include a weaker dollar, a steeper yield curve, and higher long-term inflation expectations, according to Thierry Wizman, global FX and rates strategist at Macquarie Group. If Trump succeeds, “it may result in a Fed that will be more pliant with respect to those White House wishes, especially if Congress concedes its role. That means a Fed that keeps interest rates lower than they otherwise would be.”
This means that inflation, held in check by higher rates, may increase in the longer view and, as such, “nominal assets, such as fixed-coupon long-term bonds, will look less attractive as stores of real value.”
Politics8 years ago