Idealism or Opportunism?

HANNAH MURPHY

Ottawa Citizen Jan 05, 2026 TECH ELITES ARE STARTING THEIR OWN PRIVATE CITIES WITHOUT ALL THAT PESKY DEMOCRACY

Balaji Srinivasan, former chief technology officer of Coinbase, the cryptocurrency exchange, turns to address the hundreds of tech workers and investors filling a darkened arena in Singapore — all there to learn how to build empires.

“I think it's fair to say,” he pronounces from the stage, palms outstretched, “in 2025, we have a movement.”

It is early October and Srinivasan is hosting what he's called the Network State Conference, an event targeting “those interested in founding, funding and finding new communities.”

For years, the entrepreneur has preached to clubby tech gatherings that they should gather their online comrades and set up a physical homeland — a network state, be that a city or a country — by joining together to buy land. He has hailed this as the “ultimate exit” by Silicon Valley from “failing” U.S. institutions and democracy.

But what was a fringe concept a matter of years ago is now attracting more interest as scrappy startup chief executives and aggrieved billionaires contemplate the allure of tech-friendly havens unbound by legacy rules and regulation. While some are aspirational, reliant on their founders securing hard-to-come-by special economic zone status, there are now about 120 “startup societies” in the works, according to an open-source database shared by Srinivasan. A few have received hundreds of millions of dollars in venture capital from funds backed by the likes of investors Peter Thiel and Marc Andreessen, Openai founder Sam Altman and Brian Armstrong, Coinbase chief executive.

Srinivasan himself has started a “Network School” on an artificial island near Singapore, where techno-optimists can work their day jobs remotely while living in a hotel together and learning how to “bootstrap,” or build, a new society. Membership and accommodation, which he dubs “society-as-a-service,” starts at US$1,500 a month.

For proponents, the initiatives offer the opportunity to address all that they believe has caused a decline in American dynamism, from monetary policy to taxation. San Francisco, in particular, has for years been affected by high levels of homelessness and crime, prompting an exodus of tech workers during COVID.

“It's young people being dissatisfied with stagnation, corruption and isolation,” says Amjad Masad, chief executive of AI coding company Replit, who has observed the rise of the network state movement. Last year, he moved Replit to Foster City — a master-planned city built in the 1960s on marshlands near Silicon

Valley — to escape what he described as the “suffering on the streets” of San Francisco. “Young people are clearly yearning to discover new ways of living and building through technology,” he adds.

But the movement's toughest critics — of whom there is no short supply — cast it as either a bid to play god or an attempt to avoid red tape, more opportunistic than idealistic. Others argue it is part of a broader rise in techno-fascism, or a form of authoritarian rule by technocrats. Either way, they assert, the movement is born from an elite victim complex.

Thiel, who has a net worth of US$27 billion and is one of the biggest funders of the space, gave a series of Manichaean lectures in recent weeks about the “Antichrist.” In between arguing that AI skeptics and Greta Thunberg were Satan, he complained that wealth gives the “illusion of power and autonomy but you have this sense it could be taken away at any moment.”

“Can you imagine being that rich and that miserable?” says Olivier Jutel, a lecturer at the University of Otago in New Zealand and an expert in cyberlibertarianism. “They think they are the grand solutionists that can fix all the problems, but it's so insular. But just because it's stupid doesn't mean it won't inherit the Earth.”

Patri Friedman leans back on his sofa, head propped up by a red cushion, and steals a quick puff on his vape. “This whole movement is about reinventing governance for the 21st century, inspired by startups and the internet,” says Friedman, grandson of free-market economist Milton Friedman and founder of Pronomos Capital, a venture firm that invests in experimental cities.

Over Zoom, he explains that, as a committed libertarian, he came into the space in the hope of building a state that mirrored his politics. In a democracy, he says, “power is so diluted” that the people cannot stop laws being passed that “help special interests and harm the masses.” Now, he says, he wants “a home for my tribe.” To that end, he is attempting to create cities that are run like a for-profit company, rather than by democratically elected officials. “A private venture-backed company is the city operator and (its directors) design the laws and they earn revenue through some combination of rents, taxes, service fees,” he says of his proposed model.

For this to work, however, he needs targeted countries to pass legislation that will delegate to his projects the “right to write some subset of the regulations.” Recently, he has been exploring opportunities in eight countries in Africa, proposing initiatives that will develop around their existing economic engine, whether that is agriculture or cheap renewable power.

The hard sell from Friedman and those like him is that the right projects will also boost the local community, bringing in foreign direct investment, talent and jobs. Friedman is confident that some legislation will be passed next year: “The product market fit today, for what I do, I strongly believe is helping the global south to become first-world.”

Friedman is cheerfully contrarian and wants to unlock what those in the space dub “radical governance optionality” so that even those who don't share his politics can experiment. “It's kind of like an oligopoly, right? There's 193 firms and it's super, super hard to start a new one. And it's super hard to switch (between) them,” Friedman says, meaning the 193 Un-recognized nations that exist globally.

“My work over the last 25 years has been, how do we lower the barrier to entry, make it so that people can start new jurisdictions so that we can innovate? Maybe somebody makes a communist city state that works incredibly well, more power to them. I just want people to be able to try new things.”

Friedman's ideas are by no means new. In Ayn Rand's 1957 novel Atlas Shrugged, a libertarian bible, the author imagined a free-market enclave called Galt's Gulch. During Barack Obama's presidency, far-right blogger Curtis Yarvin called for the global order to be substituted with thousands of “sovereign and independent mini-countries, each governed by its own joint-stock corporation without regard to the residents' opinions.”

In a less consequential governance experiment, every summer hundreds of San Francisco software engineers make the pilgrimage to Nevada to set up Black Rock City — also known as Burning Man festival — for a fortnight of “radical self-expression,” per its principles, and debauchery, before dismantling their tents and returning to their computer monitors.

Some of the earliest investment into tech-aligned nation-building came from Thiel, who in 2008 donated US$500,000 to the Seasteading Institute, a non-profit founded by Friedman dedicated to setting up autonomous “floating societies” atop platforms in international waters.

While enthusiasm for seasteading has since waned for practical reasons (“I think the ocean is just too difficult and expensive,” Friedman tells me), the crypto boom has breathed new life into the broader space. If decentralized currencies could be created outside of government oversight, could a new type of society be built on top of these currencies?

Emboldened, in 2022 Srinivasan published his book The Network State, laying out a bold vision, including that the states should be undergirded by a crypto economy. “You can found a tribe just like you can found a startup. That's what Joseph Smith of the Mormons did. That's what Abraham did. That's what Jesus did,” he said on a 2023 podcast. “What I'm really calling for is something like tech Zionism.”

Srinivasan's bid to set up societies that are a law unto themselves has inspired a host of projects that are more modest in their ambition: experimental cities that achieve some — but not full — autonomy from the local government, particularly in the civil and commercial realm. Soon venture capital and crypto money started flowing into these city initiatives, despite being a highrisk investment with no expectation of quick — or perhaps any — returns. “They are ideological — if you're in crypto, you're libertarian,” says Replit's Masad. He argues that venture capital investment in these projects rose as returns on software investment have plateaued and investors sought “the next big thing.”

Jutel offers a more skeptical explanation. Some venture capitalists have invested deeply in crypto projects that are worthless unless future economies run on their crypto tokens, he says. They are therefore incentivized to promote network states, with their large crypto component, to keep the dream alive, he says, and have “assumed this big role in not simply funding this but being the key figureheads of this.”

In Mountainhead, the 2025 satirical film by Succession creator Jesse Armstrong, four tech moguls stranded in a Utah lodge plot how they might set up a new world order. Perhaps, one of the characters suggests, they should take over El Salvador as a test run? Or just head straight for the United States?

The reality may be just as wild. Arguably the most evolved experiment in alternative governance is Próspera, a gated private community on a Honduran island run by a Delaware-based company, where close to 1,000 residents can enjoy co-working spaces, a beach resort and a golf course. As a for-profit semi-autonomous zone, Próspera has low taxes, its own labour rules and an arbitration system run by retired Arizona judges who hear its cases online. Bitcoin is one of the currencies of choice.

Its founder, Venezuelan-born wealth fund manager Erick Brimen, describes his work as “an evolved way to drive socio-economic development” through public-private partnerships. As evidence that the initiative is “very much focused on lifting people up,” including Honduran locals, he highlights that Próspera has created more than 4,000 jobs and brought more than US$150 million in foreign direct investment to the area. “The vibes that you feel here are really positive (against) a backdrop where people are fleeing a country out of desperation to try to find a way to make a living,” he says. “We are succeeding beyond expectation.”

MILLIONS FLOWING

Already it has raised tens of millions of dollars from Friedman's Pronomos and venture capital funds backed by Altman and Andreessen, among others. In January, Brian Armstrong announced that Coinbase's venture arm would invest in Próspera as it was “in line” with its “mission of creating economic freedom.”

Despite this, Jutel notes that Próspera still “hasn't attracted the best talent, founders, funders — you still need to be in the midst of San Francisco where all the deal flow is happening and all the labour you need.” But Próspera's hands-off approach to medical regulation has made it a mecca for people seeking experimental treatments as the field of longevity — or trying to live forever — becomes more popular in Silicon Valley circles. Former tech founder turned biohacker-influencer Bryan Johnson went there for otherwise-unapproved follistatin gene therapy treatment.

Próspera shuns the “network state” label, saying it follows Honduran sovereignty. Critics argue that the special economic zones legislation that allowed for Próspera to be established was championed by a corrupt former government whose leader, Juan Orlando Hernández Alvarado, has just been released from prison, where he was serving a sentence for narco-trafficking and weapons crimes, following a pardon from Trump. The government at time of writing (an election took place on Nov. 30) since tried to repeal its charter on the grounds that, as ruled by the country's supreme court, self-governing special economic zones are unconstitutional. Próspera is now suing the government for US$11 billion — just under a third of the country's GDP — for lost future profits, through an international arbitration process.

Guillaume Long, Ecuador's former minister of foreign affairs and a research fellow with the Center for Economic Policy and Research, describes it to me as “a predatory project in a weak state,” adding: “If you're a weak state and you're giving over large portions of land to a private state, there's a really dystopian, really futuristic and really feudal aspect to this.”

Cornell University historian Raymond Craib, author of Adventure Capitalism: A History of Libertarian Exit, from the Era of Decolonization to the Digital Age, says it offers a warning to elected politicians about the dangers of carving out semi-autonomous zones: “Precisely what Próspera is doing (suing Honduras) is precisely the argument governments are going to make about why you should not be editing your constitution to allow for this.”

Brimen waves off much of the criticism as “lazy,” standing by his decision to sue the Honduran government. “What they need to do is follow the law,” he says. “That is the way it should be and I'm proud of it, and Honduras will be better for it.”

Not all models are as bold. Some will flirt with self-governance while balking at Srinivasan's full network state “exit” push.

One area gathering traction is extended “pop-up cities” — where tech workers and creatives descend on one location for what is essentially a weeks-long conference-meets-co-working session.

“We want to create what (Ethereum founder) Vitalik Buterin called a `micro exit' — a temporary exit to experiment, then go back and spread those learnings around the world,” says Timour Kosters, co-founder of Edge City, a non-profit that bills itself as a “society incubator.” From mid-october, it hosted a month-long pop-up in Patagonia for 500 residents, with events held on topics such as artificial intelligence and longevity. “There's a lot of builder energy,” he says. Others focus on improving governance in existing cities without pursuing exclusive sovereignty, inspired by regulation-lite so-called “charter cities” such as Singapore, Hong Kong and Dubai, which have more legal autonomy. Donald Trump promised during his 2024 presidential campaign that he would develop 10 charter cities in the U.S., dubbed “freedom cities” in order to boost American innovation in light of the U.s.-china tech race, sending ripples of excitement through the space and prompting some projects to now lobby for their own initiatives to be taken up.

Mark Lutter, founder of the non-profit Charter Cities Institute, admits that he “poked the hornets' nest” by publicly arguing San Francisco's idyllic Presidio district should gain that status, prompting a backlash from liberal locals. Earlier this year, he released a white paper about turning Guantánamo Bay into a “freedom city” with the tag line “From Detention To Development.”

Meanwhile, Silicon Valley billionaires including Andreessen, Reid Hoffman and Michael Moritz have put money into California Forever, a group that has quietly bought up US$1 billion worth of land in Solano county in its bid to build a walkable mega-development with affordable housing and a shipping complex — without extra autonomy.

PRAXIS

One of the more whimsical and rebellious attempts at setting up a new city has been led by 29-year-old Dryden Brown, a home-schooled professional surfer with a penchant for Austrian economics. Over the past few years, he has gathered libertarian friends, influencers and Silicon Valley edgelords — first over group chat then at opulent dinners in New York and elsewhere — to brainstorm what a techno-utopian city-state should look like, dubbing the movement Praxis.

“The key word in the scene would be `based',” says Richard Craib, founder and chief executive of AI hedge fund group Numerai and a seed investor in the initiative, referring to the internet slang for being unapologetically politically incorrect. (Richard Craib is no relation of Raymond Craib.) The vibe among enthusiasts, he said, was: “Are you based? How based are your views?”

Another Praxis diner, who spoke on condition of anonymity, is less generous. “It felt like everyone was pontificating with the intellectual calibre of a state college seminar,” the person says. Still, Craib was drawn to the project as a “moon shot investment in something divergent” with a distinct “neo-promethean” esthetic, he explains. He is not alone — Brown explains he has assembled 150,000 prospective citizens, among them key members of Elon Musk's controversial so-called Department of Government Efficiency initiative, and he has raised early funds from investors such as Friedman's Pronomos Capital, Sam Altman's Apollo Projects and the Winklevoss twins, followed by half a billion dollars from a crypto investment company.

Praxis recently announced plans to start a “defence-focused spaceport city” called Atlas at Vandenberg Space Force Base in California, already home to companies including Musk's Spacex and Jeff Bezos's Blue Origin. This, experts note, could become a hub for defence tech companies and workers at a moment when U.S. venture capital is readily flowing into the space.

Brown is also looking to establish a non-u.s. city that can “accelerate western traditional progress” next year, citing the potential future need for a techie escape from America. “There has been deep integration with the tech elites in the Valley and D.C. in the White House in this Trump administration,” Brown says. “But if we get a populist Democrat in (2028) — a (Zohran) Mamdani or an AOC (Alexandria Ocasio-cortez) — the fear is that the friendliness might not persist towards technology.”

For most, there is a long road ahead with multiple hurdles. “A lot are speculative and don't end up materializing,” says Erin Mcelroy, author of the book Silicon Valley Imperialism, noting that the designers and funders often believe they can bypass laws that they are ultimately unable to.

Many “are not anti-state but (are) efforts to rework what the relationship with the state is,” says Cornell's Craib. He notes that Próspera has caught the interest of some U.S. politicians, with a small group of Republican officials from Florida visiting the site in November. In a blog post, Próspera said this underscores the “growing U.S. interest in Próspera Honduras as a platform for investment, innovation, and economic growth.”

“It's not just another version of Burning Man. It's wedged into the new round of people who have begun to occupy the corridors of government. There's a convergence that is troubling,” Craib says.

There is also the lingering question of the impact of these projects on the local communities where they are built, with critics casting them as likely to displace or harm citizens. Próspera has been publicly castigated by some residents of the neighbouring African Caribbean fishing village of Crawfish Rock for disrupting the local community. (Brimen claims that these critics “are being paid by political parties and opposition groups to act as if there are tensions” where there are not.)

Patri Friedman initially pushes back on the notion of these projects as neocolonialist, declaring “most of our projects are greenfield.” He pauses. “Although, in Africa, we are looking at land parcels large enough that there will be people living there, in which case we will offer relocation bonuses to pay for anybody who wants to move out of the zone.”

And what about fears that this marks the rise of techno-fascism? “I mean, we are funding companies that will operate non-democratic cities,” he says, shrugging. “And if you're not into that you shouldn't move there.”

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