AI and Crypto Spent Millions in Illinois Primaries — And Lost

# AI and Crypto Spent Millions in Illinois Primaries — And Lost Silicon Valley and the crypto industry just learned an expensive lesson in Illinois: **money talks, but voters don't always listen.** Tuesday's Illinois Democratic primary results are in, and the tech industry's report card is brutal. Across multiple contested races — from congressional seats to state legislative primaries — candidates backed by AI and crypto PACs underperformed, lost, or got blown out by opponents who ran explicitly against tech industry influence. The total spend from tech-aligned PACs in Illinois primaries exceeded **$12 million**. The return on investment: close to zero. ## What Happened The biggest race was Illinois' 5th Congressional District, where crypto-backed candidate Marcus Webb lost to progressive labor attorney Diana Ruiz by 14 points. The crypto PAC Fairshake spent $3.8 million on Webb's behalf — more than Ruiz's entire campaign budget. It didn't matter. In the 3rd District, AI industry-aligned candidate Steven Park lost to incumbent ally Jeanette Morales by 11 points, despite $2.1 million in outside spending from the AI Policy Alliance PAC. State legislative races told the same story. In four targeted Illinois House primaries, tech-backed candidates went 1-3, with the sole win coming in a race where the opponent was already damaged by an unrelated scandal. ## Why They Lost The simple explanation is that voters in Democratic primaries — particularly in Chicago and the collar counties — don't trust the tech industry right now. And the campaigns funded by tech money couldn't overcome that fundamental credibility gap. **Reason 1: The messenger problem.** When a candidate's biggest financial backer is a crypto PAC, it's hard to convince voters that the candidate is running to serve *their* interests. Ruiz's campaign leaned into this hard, running ads that literally said: "My opponent is funded by crypto billionaires who want to write their own rules." That's a devastating attack in a Democratic primary, and Webb never found an effective counter. **Reason 2: The timing problem.** These primaries happened during a week when AI-generated deepfakes were dominating headlines (a fake Biden endorsement video went viral on Monday), and crypto was in the news for a $400 million exchange hack in South Korea. The industries spending money on elections were simultaneously generating the negative headlines that made voters skeptical of them. **Reason 3: The substance problem.** Most tech-backed candidates struggled to articulate why AI and crypto policy expertise was relevant to their constituents' daily lives. When asked about housing costs, healthcare, and education, they pivoted to "innovation economy" talking points that landed flat in communities dealing with concrete economic pressure. ## The Bigger Pattern Illinois isn't an isolated case. This fits a pattern that's been building since the 2024 cycle: - In 2024, crypto PACs spent over **$130 million** on federal races. They won some (particularly in swing districts), but their win rate in Democratic primaries was below 40%. - AI industry lobbying spending tripled from 2023 to 2025, but public favorability toward AI companies has dropped from 52% to 38% in the same period (Pew Research, January 2026). - The tech industry's political strategy has been modeled on the financial sector playbook from the 2000s: spend big, support friendly candidates, shape regulation. But unlike Wall Street, tech companies don't have decades of bipartisan relationships to fall back on. ## What the Tech Industry Gets Wrong About Politics There's a specific kind of arrogance that comes from building products that scale to millions of users overnight. The assumption is that political influence works the same way — spend enough, optimize the message, and the outcome follows. Politics doesn't work like that. Especially primary politics. In a general election, money can move the needle because undecided voters are persuadable and low-information. In a primary, the electorate is smaller, more ideological, and more likely to view outside spending as a *negative* signal. Telling a Chicago progressive that crypto billionaires support your candidate is like telling them Goldman Sachs endorses their dinner — it makes them less hungry, not more. The tech industry's other mistake is assuming that policy expertise translates to political viability. Voters don't elect candidates because they understand Section 230 or stablecoin regulation. They elect candidates who understand their block, their school district, their commute. ## What This Means for Regulation Here's the paradox: the tech industry is spending millions on elections specifically to prevent unfavorable regulation. But the more they spend — and the more they lose — the more they confirm the narrative that tech companies are trying to buy political protection rather than earn public trust. Every lost race funded by Fairshake or the AI Policy Alliance becomes ammunition for the regulators who argue that these industries need *more* oversight, not less. "If they're spending this much to avoid regulation, what are they hiding?" is a powerful rhetorical frame, and tech lobbyists haven't figured out how to defuse it. The smarter play — which some tech companies are starting to adopt — is to invest in community-level programs, fund local initiatives, and build relationships with existing political power structures rather than trying to install friendly candidates from the outside. This is Politics 101, but it requires patience that the "move fast and break things" culture doesn't naturally produce. ## The Prediction Market Angle For those tracking political spending outcomes, [Kalshi](https://kalshi.com/sign-up/?referral=424cfbfe-a015-4bc0-98e1-0e2f317a119b&m=true) offers contracts on election outcomes and regulatory events. The Illinois results are a useful data point for modeling tech industry political effectiveness in the 2026 midterms. When the question is "will crypto-backed candidates outperform in the midterms," the primary results suggest the market should be pricing in lower expectations. ## The Takeaway The tech industry has a political influence problem, and it's not a money problem — it's a trust problem. You can't buy trust in a primary. You can't A/B test your way to political credibility. And you definitely can't spend $12 million in a state where voters are already skeptical of your industry and expect gratitude. Illinois just reminded Silicon Valley of the oldest rule in democratic politics: **legitimacy comes from the people, not the checkbook.** The tech industry would be wise to learn the lesson before the midterms. Based on the spending patterns so far, they probably won't.