Hoffman, long recognized as a political power broker and tech visionary, did not mince words as he lamented the shifting relationship between Silicon Valley and the Democratic Party. “I regret this and wish it didn’t happen, but I think the Democratic Party really did alienate a section of Silicon Valley and the tech people—whether it was attacks on crypto, whether it was, you know, kind of just attacks on Big Tech, all these things,” he said, reflecting on a schism he regards as increasingly dangerous for the party and the U.S. technology sector.

A representative for Hoffman declined to comment further.

The criticism was perhaps surprising from Hoffman, who is among the most influential—and generous—donors to the Democratic Party in recent U.S. political history. Over the past decade, he has contributed tens of millions of dollars to Democratic candidates, state parties, super PACs, and advocacy groups across the country.

He told Lonsdale that “attacks on crypto” and unspecified attacks on Big Tech were particularly harmful. “One of the things that I think Silicon Valley shares is this deep view that the way you make massive progress for humanity is creating scale technologies,” Hoffman said. “And the principal way of creating scale technologies is companies, and so if you’re attacking that and limiting it, then you have all kinds of problems.”

And yes, he said, at times this conflict has even led them to abandon traditional Democratic alliances. Lonsdale, a longtime right-of-center entrepreneur and investor, pressed Hoffman on the tension between supporting pro-innovation policy and traditional Democratic priorities such as labor protections and union power. Both Hoffman and Lonsdale decried the pessimism and tribalism they see infecting public discourse, agreeing that America requires leaders willing to collaborate across ideological lines for the sake of national progress. They cautioned that if regulatory and political obstacles continue to drive innovation out of traditional tech hubs, the country risks ceding its technological advantage.

Innovation and growth

Citing his own experience as an investor in Aurora—an autonomous-trucking company that is headquartered in California, but launching its first test-drives in Texas owing to the “modern regulatory environment”—Hoffman described how red states are rapidly becoming new laboratories of tech innovation.

He also acknowledged the recent political shift of several former allies away from the Democratic camp, including fellow member of the “PayPal mafia” Elon Musk. Marc Andreessen has also emerged as a right-friendly figure, and even OpenAI CEO Sam Altman has broken with Democrats as well, saying in early July that he was “politically homeless.”

The podcast conversation ranged widely—from Hoffman’s new book, Superagency, and the PayPal mafia’s distinctive culture, to AI optimism and the new regulatory battles shaping the technology industry. Even as he championed the promise of AI and entrepreneurship, Hoffman repeatedly returned to his core critique: Innovation has to be a core value for both left and right in America.

For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.