For months, there has been talk that Silicon Valley’s billionaire class is recruiting a candidate to replace Rep. Ro Khanna. Early Tuesday morning, the candidate made it official.
Ethan Agarwal (pictured above), a 40-year-old tech entrepreneur with no political background, told TechCrunch on Monday evening that he is running for California’s 17th Congressional District. That process is likely to set up what could be one of the most funded major challenges in the 2026 cycle.
The race is focusing on Kanna, a 49-year-old Democrat widely seen as a possible 2028 presidential candidate and who has publicly supported a one-time wealth tax in California. Although his endorsement angered the state’s wealthiest founders and investors, Khanna doubled down and introduced a national bill with Sen. Bernie Sanders that would impose a 5% annual wealth tax on all Americans worth more than $1 billion. Their offices estimate the proposal would raise $4.4 trillion over 10 years.
There is a certain irony in the situation. After graduating from Wharton and spending three years at McKinsey, Agarwal founded audio fitness company Aaptiv, which he sold in 2021. He most recently co-founded Coterie, a financial services startup backed by Andreessen Horowitz.
When Khanna first ran for the same seat in 2014, he was a tech outsider, with tech names like Marc Andreessen, Sheryl Sandberg and Eric Schmidt backing him. He challenged popular Democratic incumbent Mike Honda, lost that attempt, but came back and won in 2016.
Critics at the time called Khanna a man of possession. Ten years from now the same accusation will be leveled at anyone who tries to oust him.
Below is an edited transcript of our conversation with Agarwal.
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Tech Crunch: Last summer, you announced your plans to run for governor of California. Now you’re in a congressional race instead. Why Switch?
Agarwal: I decided to run for governor in July, when the field was very thin. I have no political background. I come from a technical background. But there are a few strong candidates on board, including Matt Mahan, who I think is really strong. I have been tracking Candidate Roh since his first National Assembly primary in 2012. I was a big supporter. But over the past few years he has taken a gradual left turn, and when he tweeted support for a wealth tax in late December, that was the straw that broke the camel’s back. I realized I could have a greater impact in ousting Roe by running in District 17.
TC: Who supports you financially?
Agarwal: I’m planning on getting my documents drawn tomorrow, so I don’t have a bank account yet and can’t save up any money until then. That said, (Y Combinator CEO) Garry Tan is behind me, (DoorDash co-founder) Stanley Tang, and many others in the tech community whose names will come out in the coming days and weeks.
(Editor’s note: The involvement of Tan, Tang and others is likely to spark familiar lines of attack: Agarwal is a vehicle for billionaire grievances rather than an independent candidate. It’s worth noting that Khanna faced much the same criticism when he first ran and was backed by the same group of tech donors as the organizations now opposing him.)
TC: Can you be more specific about your plans? Is there an alternative to the billionaire tax plan other than closing loopholes?
Agarwal: One is to tax loans against assets. Very wealthy people borrow against the assets they own and pay low interest rates. Since it’s technically a loan, you don’t pay taxes on it. I think it makes a lot of sense to tax such loans.
The second is capital gains. California’s tax rate is currently 13.4% and I think it makes sense to consider increasing it. Third, many homes in California are owned by private equity firms or investors. I believe you should pay much higher property taxes on a home you hold as an investment than if you use it as your primary residence. This will increase your income and ease the burden on your family who actually live in the place you own.
(The concept of a loan tax has been circulating among the wealthy for some time and has been particularly supported by VCs. Chamas PalihapitiyaBut it can be traced back to hedge fund titan Bill Ackman. The proposal would treat loans backed by stock holdings as a taxable event, eliminating a long-standing strategy of investors accessing portfolio value without selling and thus paying capital gains taxes.)
TC: If you were to go to Washington, what would be your top three priorities?
Agarwal: First, it prohibits stock trading by members of the National Assembly and their families. The second is to ban corporate PAC money. Third, term limits.
(Earlier in the conversation, Agarwal explained at length how 5,000 children in the 17th District, the wealthiest congressional district in the country, live below the poverty line, and described one of his proposals as making it “the first congressional district in history to completely eradicate child poverty.” That didn’t make the top three.)
TC: You accused Ro Khanna of doing a lot of stock trading. Can you explain?
Agarwal: He’s traded more stocks than any other Democrat in U.S. history, including tobacco, oil and gas, big pharma and big tech. He made 4,000 trades last year after publicly introducing a bill in Congress to ban stock trading. Even if the bill doesn’t pass, there’s nothing to stop him from imposing it himself. In my case, I plan to sell off my entire portfolio the first day I’m elected, so no one has to wonder if my vote reflects my personal account or actual beliefs.
(Both claims are worth closer examination. Khanna co-sponsored the Congressional Trust Act and filed a reform resolution calling for a ban, but has not enacted standalone legislation. As for the trading figures, Khanna has repeatedly said that he does not personally own or trade any individual stocks and that the transactions in question belong to his wife and that her premarital assets belong to an independently managed trust, which he pointed out eliminates any conflict under Office of Government Ethics rules. Whether that satisfies voters is a question the campaign will have to answer.)
TC: Should social media platforms be held responsible for the harm they cause to teens? Currently, Section 230 of the Communications Decency Act protects users from liability for content they post. Where do you stand on changing that?
Agarwal: I think Section 230 meant a lot when it was first drafted (in 1996). The goal was for the platform to essentially act as hosting. But as they evolve, they are now determining what we see because of the algorithms they drive. I don’t think it’s reasonable to hold social media companies fully responsible for what people post. The amount is too much, and it is a truly dangerous area for third parties to make subjective decisions about harmful content.
That said, I think it’s worth taking another look at the long-term effects on young people’s mental health. Talk to Meta or We all agree that we don’t want that outcome.
TC: What about regulating AI companies that are literally in your backyard?
Agarwal: Let’s think about it from a national security perspective. I am convinced that it is very important for the United States to have the strongest model, and if we do not create it, China will beat us.
Some limitations are reasonable. AI should not help people hurt themselves or others. But I don’t think it should limit a company’s ability to build and strengthen these models. It’s really important for national security purposes that we allow them to thrive.
TC: Do you think AI needs something like an FDA?
Agarwal: I had that thought. The FDA has played a critical role in keeping Americans healthy and safe. I trust the people who work there, but I can’t say that for most government agencies. It makes sense to me if there is a way to build independent, non-political authority using circular terms. But I want to make sure that it is designed to strengthen America’s national security and not for political purposes.
TC: What about prediction markets (Polymarket, Kalshi)? Do we need more regulation?
Agarwal: To be clear, both Kalshi and Polymarket are regulated by the CFTC. Part of the problem, in my opinion, is that it has created so much regulatory confusion over which states allow sports betting apps that Polymarket and Kalshi have emerged as alternatives. But the regulations they have today are actually pretty good.
TC: How do you plan to run this campaign? Are you doing this full time?
Agarwal: This is 110% of my life. I went to Harker (a private school in San Jose, California) in the area. I grew up nearby. I know hundreds, maybe thousands of people who live there. My campaign is essentially a land game. I will go to Chinese and Hindi training schools and attend cultural events. Holi is coming. Purim, the Lunar New Year, falls on Tuesday. I’ll be meeting people, going to small businesses, all that stuff.
I think this is actually the key contrast between Law and me. He’s building a national profile, and I’m perfectly fine with that if that’s what he wants to do. But they are doing such a thing by abandoning the people in their area. I’m not leaving California. I don’t use this as a stepping stone. He is a citizen. I am a local. And I think the people on 17th Street know that they need someone who just focuses on them.
TC: What first brought you into politics?
Agarwal: It may be a cliche, but my dad came here with nothing, making $14,000 a year when he first came. He started a company, took it public, and sold it. As a result, I was born on third base. I started two companies and sold both.
And I see people around me no longer benefiting from the same systems that made it all possible. People here work hard and have high potential. But the environment no longer supports them. I’ve been complaining about it for a long time, and I felt like it was time to wake up and do something.
TC: Is this the beginning of your political career?
Agarwal: This is not career driven. I see a very specific problem in District 17 that I want to address. I will impose term limits on myself. He will serve no more than five terms. Then I’ll probably go back to the private sector. Service should be a calling, not a job. And frankly, I don’t think it does a good service to the voters when it becomes a job. Even if term limits are not passed, they plan to impose them themselves. That’s what I actually believe.
(This also reflects what came out of Khanna’s early campaigns: an outsider with no interest in being a career politician except with a mandate to shake things up in the tech industry. Whether Agarwal goes further than Khanna’s first attempt in 2014 may depend on whether Khanna develops his vulnerabilities. Now, having introduced a sweeping national bill with Bernie Sanders and sitting on $15 million in campaign cash, he’s doing everything he can. It appears that there is not.)
