For months, Silicon Valley’s billionaire class was rumored to be recruiting a candidate to take on Rep. 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 night that he is running for California’s 17th congressional district. This process is likely to create what may become one of the most lavishly funded primary challenges of the 2026 cycle.
The race is turning the spotlight on Khanna, a 49-year-old Democrat widely seen as a potential 2028 presidential contender, who has publicly supported one-time California estate tax. His support has angered some of the state’s wealthiest founders and investors, but Khanna doubled down, introducing national legislation with Sen. Bernie Sanders that would impose a 5% annual estate tax on all Americans worth $1 billion or more — a proposal their offices estimate would raise $4.4 trillion over a decade.
There is a certain irony in 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 recently co-founded financial services startup Coterie, backed by Andreessen Horowitz.
When Khanna first ran for the same seat in 2014, he was the tech-backed underdog, with tech names like Marc Andreessen, Sheryl Sandberg and Eric Schmidt backing him. He challenged popular Democratic incumbent Mike Honda, lost that effort, but came back in 2016 to win.
Critics at the time called Khanna a landlord. A decade later, the same accusation will surely be leveled at the one who tries to seat him.
What follows is an edited version of our conversation with Agarwal.
Techcrunch event
San Francisco, California
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13-15 October 2026
TechCrunch: Last summer, you announced your plans to run for governor of California. Now you’re in a race for Congress. Why the switch?
Agarwal: I decided to run for governor in July when the field was very thin. I don’t have a political background — I come from a tech background. But then some strong contenders entered, including Matt Mahanwhich I believe is very strong. I’ve been following Ro since his first congressional run in 2012 — I was a big supporter. But over the past two years, he’s been steadily drifting to the left, and when he tweeted support for the estate tax in late December, that was the straw that broke the camel’s back. I realized that I could have a bigger impact on running 17th district and restoring Ro.
TC: Who supports you financially?
Agarwal: We’re drawing tomorrow so we don’t have a bank account yet and I can’t collect any money until then. This is what he said – [Y Combinator CEO] Gary Tan is behind me, [DoorDash co-founder] Stanley Tang and many others from the tech community whose names will be announced 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, and was backed by much of the same tech-donor class that is now organizing against him.]
TC: Can you give me a little more color in your design? Beyond closing loopholes, is there an alternative to the billionaire tax?
Agarwal: One is the taxation of loans made against assets. Very rich people will get a loan against their holdings and pay low interest. Because it’s technically a loan, they don’t pay taxes on it. I think it makes a lot of sense to tax these loans.
Second is capital gains — California’s rate is currently 13.4%, and I think it makes sense to consider raising that. Third, many homes in California are owned by private equity firms or individuals who own them as investments. I believe you should pay significantly higher property taxes on a home held as an investment than as a primary residence. This would increase revenue and reduce pressure on families who actually live on 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.]
TC: If you make it to Washington, what will be your top three priorities?
Agarwal: Number one, stock trading ban for members of Congress and their families. Number two, ban 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.]
TC: You have accused Ro Khanna of being a prolific stock trader. Can you explain?
Agarwal: He trades 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 trading ban in Congress and then made 4,000 trades last year. Even if the bill didn’t pass, there’s nothing stopping him from imposing it on himself. In my case, I’m going to hand over my entire portfolio on the first day I’m elected, so no one has to wonder if my votes reflect my personal account or my true 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 standalone 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 pre-marital 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.]
TC: Should social media platforms be held responsible for harming teenagers? Section 230 of the Communications Decency Act currently protects them from liability for what users post. Where do you think you should change this?
Agarwal: I think Article 230, when it was first drafted [in 1996]it made a lot of sense. The aim was for the platforms to function basically as hosting. But as they’ve evolved, they now determine what we see because of the algorithms they push. I don’t think it makes sense to hold social media companies entirely responsible for what people post — the volume is too high, and making subjective determinations of what’s harmful is getting into really dangerous territory.
That said, I think it’s worth revisiting when it comes to long-term effects on adolescent mental health. If you talk to Meta, X, or anyone, they’ll all say they don’t benefit from hurting teenagers. We are all aligned in not wanting that as an outcome.
TC: What about regulating AI companies, many of which are literally in your backyard?
Agarwal: I think of it from a national security perspective. I’m sure 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 harm yourself or someone else. But I don’t think we should limit the ability of companies to create and enhance these models. It is very important that we allow them to thrive, for reasons of national security if nothing else.
TC: Do you think we need something like an FDA for AI?
Agarwal: I 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 can’t say for most government agencies. If there is a way to build an independent, apolitical power with alternating terms, that makes sense to me. But I want to make sure it’s designed to enhance America’s national security, not for political purposes.
TC: What about prediction markets — Polymarket, Kalshi? Do they need more setup?
Agarwal: 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 is allowed in which states that Polymarket and Kalshi have emerged as alternatives. But the regulation they have today is really very good.
TC: How do you plan to execute this campaign? Do you do it full time?
Agarwal: This is 110% of my life. I went to [the private San Jose, Ca., school] Harker, located in the area. I grew up nearby. I know hundreds, maybe thousands of people who live there. My campaign is basically a ground game — I go to Chinese and Hindi education schools, to cultural events. Holly is coming. Chinese New Year, Purim, is on Tuesday. I’ll be all over it, meeting people, going to small businesses.
I think that’s really the main contrast between Ro and I: he’s building a national profile, and I’m perfectly fine with that if that’s what he wants to do. But he does so while abandoning the people of his region. I’m not leaving California. I don’t use it as a stepping stone. He is national. I’m local. And I think people in the 17th know that they need someone who is just focused on them.
TK: What was the trigger for entering politics in the first place?
Agarwal: Maybe this is crazy, but — mine dad he came here with absolutely nothing, making $14,000 a year when he first arrived. He started a company, took it public, sold it. As a result, I was born on third base. I have 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 this possible. The people here are hardworking, with high potential — but the environment no longer supports them. I’ve been complaining about this for a long time, and I felt it was time to stand up and do something.
TC: Is this the beginning of a political career?
Agarwal: This is not a career axis. I see a very specific problem in the 17th arrondissement that I want to solve. I will impose term limits on myself—no more than five terms—and then probably go back to the private sector. Service should be a calling, not a job. And frankly, I don’t think it serves your constituents well when it becomes a career. Even if the limits bill doesn’t pass, I’m going to impose it on myself. That’s what I really believe.
[That also echoes something from Khanna’s early campaigns — the outsider who arrives with no interest in becoming a career politician except a mandate from the tech industry to shake things up. Whether Agarwal gets further than Khanna’s first attempt did in 2014 may depend on whether Khanna develops any vulnerabilities of his own. Right now, introducing sweeping national legislation with Bernie Sanders and sitting on $15 million in campaign cash, he appears to be doing everything he can to ensure he doesn’t.]
