“Algorithmic Discrimination”: David Sacks Exposes How Democrats Are Plotting To Unleash “Woke AI” Across America

White House AI and Crypto Czar David Sacks blasted Democrat-controlled states, spearheaded by California, for pushing a wave of regulations that could force “woke AI” on the nation.

Speaking on the popular All-In podcast, Sacks discussed the frenzy of state-level AI legislation, noting that all 50 states have introduced AI bills in 2025, with over 1000 bills flooding state legislatures and 118 AI laws already passed.

“The red state proposals for AI in general have a lighter touch than the blue states,” Sacks said. “But everyone just seems to be motivated by the imperative to do something on AI, even though no one’s really sure what that something should be.”

🚨 David Sacks on How Blue State AI Laws Are Encouraging “Woke AI”

“The only way that I see for model developers to comply with this law is to build in a new DEI layer into the models.” pic.twitter.com/OI5A31xsAq

— Chief Nerd (@TheChiefNerd) October 3, 2025

Sacks zeroed in on California as the epicenter of this regulatory overreach, pointing to far-left California State Senator Scott Wiener’s (D) SB 1047 and a slate of 17 additional bills from his clique of radical legislators. Sacks said that the Golden State’s approach as starting with mere “red tape” on safety risk reporting, but warned it’s “the camel’s nose under the tent,” potentially multiplying into a nightmare for startups navigating 50 separate state regimes—far worse than the European Union’s harmonized efforts.

This patchwork of rules, Sacks argued, traps entrepreneurs in compliance chaos, forcing them to decipher varying reporting deadlines, authorities, and requirements. “This is like very European style regulations. Actually, [they’re] maybe even worse than the EU,” the venture capitalist-turned-Trump official said.

Sacks also pointed to Colorado’s SB24-205, the Consumer Protections for Artificial Intelligence law passed in May 2024, as a harbinger of things to come. The law bans “algorithmic discrimination,” defined as unlawful differential treatment or disparate impact based on protected characteristics like age, race, sex, or disability. Both AI developers and businesses deploying the tech could face prosecution by the state attorney general if decisions yield disparate impacts, even from race-neutral criteria like credit ratings in mortgage applications.

In a practical example, Sacks illustrated how a loan officer using neutral financial data could still be deemed discriminatory if outcomes disproportionately affect protected groups, holding developers liable despite truthful outputs. “The only way that I see for model developers to comply with this law is to build in a new DEI layer into the models to basically somehow prevent models from giving outputs that might have a disparate impact on protected groups,” Sacks warned. “So, we’re back to woke AI again.”

Sacks played a pivotal role in shaping President Donald Trump’s executive order aimed at combating “woke AI” by ensuring federal procurement prioritizes ideologically neutral and truth-seeking AI models over those infused with biases like DEI, critical race theory, or transgenderism.

As one of the primary architects of the July 2025 directive, Sacks collaborated closely with White House senior policy advisor Sriram Krishnan to define “woke AI” and outline principles preventing government contracts with biased systems, drawing on his Silicon Valley expertise and consultations with figures like anti-DEI activist Chris Rufo for drafting input.