For months, there has been talk that Silicon Valley’s billionaire class was recruiting a candidate to take on Representative Ro Khanna. Early Tuesday morning, that 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 may become one of the most lavishly funded primary challenges of the 2026 cycle.
The race puts a spotlight on Khanna, a 49-year-old Democrat widely seen as a possible 2028 presidential candidate, who has publicly backed a one-time wealth tax in California. His endorsement has infuriated some of the state’s richest founders and investors, but Khanna just doubled down anyway, introducing national legislation on Monday with Senator Bernie Sanders that would impose a 5% annual wealth tax on all Americans worth $1 billion or more — a proposal their offices estimate would raise $4.4 trillion over a decade.
There’s a certain irony to the situation. Agarwal is a graduate of Wharton and spent three years at McKinsey before founding audio fitness company Aaptiv, which he sold in 2021. He most recently co-founded financial services startup Coterie, backed by Andreessen Horowitz.
When Khanna first ran for this same seat in 2014, he was the tech-backed outsider, with tech names like Marc Andreessen, Sheryl Sandberg, and Eric Schmidt supporting him. He challenged popular Democratic incumbent Mike Honda, lost that attempt, but came back in 2016 to win.
Critics at the time called Khanna an owned man. A decade later, the same charge will surely be leveled at the person trying to unseat him.
What follows is an edited version of our conversation with Agarwal.
Last summer, you announced plans to run for governor of California. Now you’re joining a congressional race instead. Why the switch?
I decided to run for governor back in July when the field was really thin. I don’t have a political background — I come from tech. But then a few strong candidates got in, including Matt Mahan, who I think is really strong. I’ve been tracking Ro since his first congressional race in 2012 — I was a big supporter. But in the last couple of years, he’s been incrementally pivoting left, and when he tweeted support for the wealth tax at the end of December, that was the straw that broke the camel’s back. I realized I could have more impact running in the 17th district and unseating Ro.
Who is backing you financially?
We’re pulling papers tomorrow, so we don’t have a bank account yet and I can’t raise money until then. That said — [Y Combinator CEO] Garry Tan is behind me, [DoorDash co-founder] Stanley Tang, and a lot of others from the tech community whose names will come out in the coming days and weeks.
[Editor’s note: The involvement of Tan, Tang, and others will likely fuel a familiar line of attack: that Agarwal is less an independent candidate than a vehicle for billionaire grievances. It is worth noting that Khanna faced nearly identical criticism when he first ran.]
Can you give me a little more color on your plan? Beyond closing loopholes, is there an alternative to the billionaire tax?
One is taxing loans taken out against assets. Very wealthy people will take a loan out against their holdings and pay low interest. Because it’s technically a loan, they don’t pay taxes on it. I think it’s very reasonable to tax those loans.
Second is capital gains — California’s rate is currently 13.4% and I think it’s reasonable to consider increasing that. Third, a lot of houses in California are owned by private equity firms or people holding them as investments. I believe you should pay significantly higher property taxes on a home held as an investment than as a primary residence. That would both raise revenue and ease pressure on families who actually live in what they own.
[The loan-tax idea has been circulating in wealthy circles for some time — notably espoused by VC Chamath Palihapitiya, though it may trace back further to hedge fund giant Bill Ackman. The proposal would treat loans backed by stock holdings as taxable events, eliminating a longstanding strategy by which investors access their portfolio’s value without selling, and thus without ever paying capital gains taxes.]If you make it to Washington, what will your top three priorities be?
Number one, banning stock trading for members of Congress and their families. Number two, banning corporate PAC money. Number three, term limits.
[Earlier in the conversation, Agarwal spoke at length about the 5,000 children in the 17th district — the wealthiest congressional district in the country — living below the poverty line, and described making it “the first congressional district in history to completely eradicate childhood poverty” as one of his proposals. That point did not make the top three.]
You’ve accused Ro Khanna of being a prolific stock trader. Can you explain?
He’s been trading more stocks than any Democratic congressman in the history of the country — in tobacco, oil and gas, Big Pharma, Big Tech. He publicly introduced a congressional stock trading ban, and then made 4,000 trades last year. Even if the bill didn’t pass, nothing is stopping him from imposing it on himself. In my case, I’m going to divest my entire portfolio the first day I’m elected, so no one has to wonder whether my votes reflect my personal account or my actual beliefs.
[Both claims deserve scrutiny. Khanna has co-sponsored the TRUST in Congress Act and introduced reform resolutions calling for a ban but hasn’t authored stand-alone legislation. On the trading figures, Khanna has repeatedly said that he does not personally own or trade any individual stocks and that the trades in question belong to his wife, whose premarital assets are held in an independently managed trust — which, he noted, eliminates any conflict under Office of Government Ethics rules. Whether that distinction satisfies voters is a question the campaign will have to answer.]
Should social media platforms be held responsible for harming teens? Section 230 of the Communications Decency Act currently shields them from liability for what users post. Where do you stand on changing that?
I think Section 230, when it was first drafted [in 1996], made a lot of sense. The goal was for platforms to serve basically as hosting. But as they’ve evolved, they’re now determining what we see because of the algorithms they push. I don’t think it makes sense to make social media companies entirely liable for what people post — the volume is too high, and having a third party make subjective determinations about what’s harmful gets into really dangerous territory.
That said, I do think it’s worth revisiting when it comes to long-term impacts on teenagers’ mental health. If you talk to Meta, or X, or anyone, they’ll all say they don’t benefit from hurting teenagers. We’re all aligned in not wanting that as an outcome.
What about regulating AI companies, many of which are literally in your backyard?
I think about it from a national security perspective. I’m confident that having the most powerful models is critical for America, and if we don’t build them, China will beat us.
Some restrictions make sense — AI shouldn’t help you hurt yourself or someone else. But I do not think we should be limiting companies’ ability to build and strengthen these models. It’s really critical that we allow them to thrive, for national security purposes, if nothing else.
Do you think we need something like an FDA for AI?
I’ve heard that idea. The FDA has largely done a good job of keeping Americans healthy and safe — I trust the people who work there, which I cannot say for most government organizations. If there’s a way to build an independent, apolitical authority with rotating terms, that makes sense to me. But I want to make sure it’s designed to strengthen America’s national security, not for political purposes.
What about prediction markets — Polymarket, Kalshi? Do they need more regulation?
To be clear, Kalshi and Polymarket are both regulated by the CFTC. I think part of the problem is that sports betting apps have created so much regulatory confusion about what’s allowed in which states that Polymarket and Kalshi have emerged as alternatives. But the regulation they have today is actually pretty good.
How are you planning to run this campaign? Are you doing this full-time?
This is 110% of my life. I went to [the private San Jose, California, school] Harker, which is in the district. I’ve grown up nearby. I know hundreds, maybe thousands of people who live there. My campaign is essentially a ground game — I’m going to Chinese and Hindi educational schools, to cultural events. Holi is coming up; Chinese New Year, Purim, is on Tuesday. I’m going to be at all of it, meeting people, going to small businesses.
I think this is actually the core contrast between Ro and me: He is building a national profile, and I’m perfectly fine with that if that’s what he wants to do. But he’s doing it while abandoning the people of his own district. I’m not leaving California. I’m not using this as a stepping stone. He’s national; I’m local. And I think people in the 17th know they need someone focused on them alone.
What was the impetus to get into politics in the first place?
Maybe this is corny, but my dad came here with absolutely nothing, making $14,000 a year when he first arrived. He started a company, took it public, sold it. I was born on third base as a result of that. I’ve started two companies and sold them both.
And then I see people around me no longer benefiting from the same system that made all of that possible. The people here are hardworking, high potential — but the environment isn’t supporting them anymore. I’ve been complaining about it for a long time, and I felt like it was time to stand up and do something.
Is this the start of a political career?
This isn’t a career pivot. I see a very specific problem in the 17th district that I want to solve. I’m going to impose term limits on myself — I won’t do more than five terms — and then I’ll probably go back to the private sector. Service should be a calling, not a job. And honestly, I don’t think it serves your constituents well when it becomes a career. Even if a term limits bill doesn’t pass, I’m going to impose it on myself. That’s what I actually believe.
