DNA's real value: advertising, authoritarianism, apartheid

Or how to re-legitimize "natural" hierarchies and their politics

Hey everyone, this week’s roundup got a little long so I’m breaking it up. Today’s essay is partly a primer on 23andMe and partly an argument the real value of popularizing the idea that “genetic data is valuable” traces back to advancing reactionary projects eager for apartheid and desperate to purge capitalism of recent civilizing reforms stretching back to the New Deal.

At the end of the week, the roundup will drop and focus on some of our favorite subjects: abundance & degrowth & techno-optimism & Luddism, the ongoing AI bubble, Trump’s Butlerian Jihad on the global economy, and China’s technological ascendance. I'll also be throwing in some book recommendations, a playlist, and some movie recommendations from my Diplomacy movie club. Look for that in your inbox at the end of the week.

Some housekeeping

Some lovely folks at NPR/KCRW brought me on to Question Everything and got me drunk while we talked about billionaires in February (listen here). I met Douglas Rushkoff there and went on his Team Human show to talk more about Silicon Valley, episode forthcoming. I also went on Trashfuture (listen here) and System Crash (listen here) to talk about my Silicon Valley Consensus essay. I will also be going on Ed Zitron’s Better Offline this week to talk about the ongoing AI bubble (and hawk the Silicon Valley Consensus a bit more). The second half of my SVC essay will be coming out this week too and then I’ll push out the unified beast at Security in Context sometime later—stay tuned!

Over at This Machine Kills (the podcast I co-host with Jathan Sadowski), we just released our 400th episode: we had an amazing conversation with author Malcolm Harris about his upcoming book WHAT’S LEFT, the three strategies it offers to save the world from ecological catastrophe, and how those pathways fit together into a larger vision.

On April 16, The Drift is convening a panel where I’ll talk alongside alongside Willy Staley, Sam Adler-Bell, and Delia Cai about Twitter—moderated by Elena Saavedra Buckley and hosted by NYU's Arthur L. Carter Journalism Institute. Registration is closed, but stay tuned for livestream options—tune in if you’re around! I’ll also be on a panel at NYU on May 2nd to talk with Quinn Slobodian about his upcoming book HAYEK’S BASTARDS. Our TMK episode on his book will be coming out in two weeks. And it’s worth mentioning that our conversation with Slobodian is what inspired this essay that I’ve spun out of the coming roundup.

If you like my work and want to support me, consider becoming a paid subscriber for $7 a month (the price of a dozen eggs if you’re lucky) or $70 a year (the price of a few hardcover books you won’t read)! If you are a bit more well-off, take inspiration from Engels and become a Tech Bubble financier. Share this newsletter with someone who you think might like it (or hate it)—and feel free to leave comments here or shoot me an email with further questions!

---

How was it that 23andme—a personal genomics company with access to the intimate private data of millions of people (their DNA)—went bankrupt? As Adam Rutherford points out in The Guardian, it ultimately boiled down to a data-driven junk science business model:

It didn’t invent direct-to-consumer genomics, but it made big data big business. The genius of its business model was not simply to get you to volunteer this personal data to a private company, but to persuade you to actually pay to give it to them. It then commercialised your DNA by selling it on to pharmaceutical companies, which would use it to develop drugs, ultimately for profit. It was the type of racket that a mob boss might look on and say: “And this is legal?” There was always an opportunity to opt out, but most people did not, because who reads the small print? And what did you get in exchange? A scientific trinket.

That scientific trinket was supposed to shed light on where someone came from, as well as insights into hereditary health, but those offerings rarely held up to scrutiny:

There is no method for identifying the geographical origin of your ancestors using genetics. Your ancestors about 50 generations back are from all over the world, and besides, biology does not bestow membership to a tribe or clan or people or country. What 23andMe was actually doing was comparing your DNA to that of other paying customers, and matching up where they live today, and inferring that you have ancestors in that location. It kind of works, but is mostly meaningless. When the data lets you believe that you are 37% German, or 18% Spanish, or whatever, it might feel fun, but of course there is no way of being 37% German. White supremacists loved this type of service too because – locked into their scientifically ignorant ideology – they believed it would reveal some sort of racial purity. Even when testing uncovered previously unknown ancestry from people they deem inferior, they would often attribute the results to a Jewish conspiracy.

As for the health information it provided, the results are also of profoundly limited use, because the tests are not designed to diagnose medical conditions, and the genetic variants analysed as part of the service are derived from population-level statistics, which are not particularly informative to individuals. I discovered that I have a genetic variant that at a population level is associated with a slightly higher risk of developing Alzheimer’s disease. Knowing this neither bothers me nor has prompted a change in my behaviour. It does not mean that I will get Alzheimer’s, and if you don’t have that same variant it doesn’t mean you won’t.

DNA is not fate. 23andMe was trading on ignorance of how the genome actually works, and perpetuating a deterministic view of genetics that is outmoded and wrong.

This is a great description of why 23andme’s business model was data-driven junk science, but doesn’t exactly tell us why it failed financially. Silicon Valley financiers, after all, will be the first to tell you that selling bullshit and making a profit are not mutually exclusive, but in fact hand in hand. Or you can simply look with your eyes at what Silicon Valley actually does with its Smuagian hoards?

Perhaps 23andMe going public via SPAC merger in 2021 should've been a giant red warning sign—as I wrote that year, the SPAC frenzy kicked off because it was a lucrative way for firms with poor financials to enter public markets and for early financiers to con suckers into investing, using the new meat as a pathway for an exit.

In February 2021, its merger with Richard Branson's SPAC gave the company a $3.5 billion value that peaked at a $6 billion market capitalization. It's now hovering at $35 million, up from $19 million when bankruptcy was announced. This still doesn’t capture how bad things have shaken out, but here’s one financial commentator on the day of 23andMe’s bankruptcy:

Branson’s SPAC went public via IPO at $10 a share in late 2020. It then acquired 23andMe at the company’s peak in revenues. The 1-for-20 reverse stock split last October turned each 20 shares [ME] into one share, and thereby turned the SPAC’s IPO price of $10 into $200. And today’s price of $0.73 would be $0.037 on a pre-reverse-split basis.

Early on, it became clear one of the major obstacles the company would have to overcome is that a customer only needs to order their genetic test once. Most of 23andMe's ventures were desperate attempts to eschew that limit.

When growth of the direct-to-consumer genetic tests stalled, 23andMe tried to generate a new revenue stream with its massive DNA hoard. The plan? Approach pharmaceutical giants interested in accelerating the development of new drugs and genetic therapies with access to 23andMe's DNA hoard. In 2018, 23andMe inked a four-year deal with GlaxoSmithKline that included a $300 million upfront investment and gave the drugmaker exclusive rights to use 23andMe's database for drug development. In 2022, GSK paid $50 million to extend the partnership for a fifth year, but 23andMe was unable to find another pharma partner afterwards—killing the hopes of recurring revenue through data licensing and IP rents, as well as the delusions about creating their own drug R&D program.

Back in 2020, 23andMe launched a premium subscription product aimed at giving customers "more ways to engage in their personal genetics journey" with "impactful new genetic health reports, and enhanced health and ancestry features." This, too, failed to materialize sustainable recurring revenue. So with a fundamentally flawed business model and persistent failure to generate sustainable revenue, the writing was on the wall.

And back in 2021, 23andMe paid $400 million for Lemonaid, a telehealth and pharmacy startup, as part of a failed pivot into primary care services bolstered by "personalized" genetic insights. As Stat+ News put it at the time:

“What are the chances 23andMe is going to be one of the last-standing, dominant players in telemedicine?” asked Erik Gordon, a health finance professor at the University of Michigan. “I would say the chances are very low.”

For one thing, Gordon said, telemedicine carries significant ongoing capital costs that 23andMe is not as well-positioned to manage as many of the bigger players, such as UnitedHealth Group, or even new, well-funded entrants like Amazon. A more fundamental challenge is linking the value of genetic testing to a primary care business where most of the care currently focuses on acute needs such as a bad cold or emergent illness.

“The idea that you can inform primary care with genetic testing — it’s pretty hard to connect those dots,” Gordon said. “Lemonaid’s telehealth is for things like the flu, not for stuff where someone’s genome is going to be really important.”

Even in this 2021 article, it's clear this is a desperate play made to "provide a lifeline for 23andMe's bottom line" and one that was likely to fail. 23andMe had at that point already laid of 14 percent of its staff in January 2020 after revenues dropped by more than $130 million since the previous year and the company projected it wouldn't make more until 2023. That milestone was never hit (the company never saw a profit), in September 2024 all seven independent directors on the company’s board resigned, and in November 2024 it laid off 40 percent of its workforce.

Revenue declined, losses grew, user growth slowed, partnerships never materialized, acquisition and R&D costs mounted—the writing was on the wall for anyone who wanted to read it. Take these charts from CNN’s Rosa de Acosta:

And this is before we even get to the constant breaches and thorny questions about privacy as hackers and corporations gained access to millions of consumers’ genetic data. Sidestepping all this, it also doesn't help that this was clearly obvious even before the SPAC merger back in 2021. Take this Financial Times op-ed from Hug Young Reinhoff Jr, who founded bio-tech startup DNA Sciences in 1998 with venture capital backing and board members like Jim Watson (one of the scientists who discovered DNA's double helix structure):

On August 1, 2000 we launched the web-based Gene Trust, a platform to recruit patients online to participate in studies to identify the genetics of common disease. Thousands participated. At our peak we were spending $3mn a month.

Six years later, long after the demise of DNA Sciences, 23andMe essentially copied our efforts but focused almost entirely on brand creation making DNA collection “celebrity cool”. Indeed, they created significant brand awareness. What they apparently have not experienced was our own early “epiphany” that doing genetics was not a business model. This revelation was true for the other significant companies sequencing and genotyping — Incyte Corp, deCode Genetics, Celera Genomics, to name a few. Though deCode has been fantastically productive doing first-rate genetic studies, it nevertheless had to find a sponsor in Amgen to sustain its efforts. Indeed, Big Pharma, most significantly GSK, has “dabbled” in genetic studies to the tune of billions with very little to show for it over the last 25 years.

The brand equity of 23andMe has been destroyed and leaves a stain on such efforts, given the low quality of the personal medical data and the constant threat of breaches. DNA sequence is now a commodity and large-scale efforts, sponsored by the government and foundations such as UK Biobank, render commercial efforts inadequate and irrelevant.

Genetics has an unbelievable allure, perhaps even more to non-geneticists, but most DNA data is gangue, not ore. It is the individual prospectors mining big DNA databases who occasionally hit pay dirt.

So if 23andMe, other bio-tech startups, and pharmaceutical giants can’t hit pay dirt when mining big DNA databases…who can? A few days after 23andMe declared bankruptcy, it revealed a U.S. judge ruled the company could sell customer medical and ancestry data as part of the proceedings—prompting multiple state attorney generals to remind people that they can and should delete their data if they foolishly used the service over the years.

What could that data be used for? David Choffnes, a computer science professor at Northeastern University and executive director of its Cybersecurity and Privacy Institute, told The Associated Press:

“There’s still other things that they are allowed to do with that data, including, as they mentioned, provide cross context, behavioral or targeted advertising,” he said. “So, you know, in a sense, even if they aren’t sending your personal data to an advertiser, there’s a long line of research that identifies how third parties can re-identify you from de-identified data by looking for patterns in it. And so if they’re targeting you with advertisements, for example, based on some information that they have about your genetic data, there’s probably a way that other parties could piece together other information they have access to.”

As Jason Koebler points out in 404Media, 23andMe (or whoever buys the data) could go even further:

Other genetic sequencing companies have shared customer information with police and governments, pharmaceutical companies, and health insurers. GED Match, a non-profit that once claimed it would protect customers’ genetic data, was sold to a for-profit company called Verogen, which works with the FBI and was later sold to a Dutch multinational conglomerate. Police now regularly attempt to identify suspects using information pulled from commercial genetic databases like the one that 23andMe has created.

23andMe’s bankruptcy means that the company will be put up for sale, and there’s no way of knowing who is going to buy it, why they will be interested, and what will become of its millions of customers’ DNA sequences. 23andMe has claimed over the years that it strongly resists law enforcement requests for information and that it takes customer security seriously. But the company has in recent years changed its terms of service, partnered with big pharmaceutical companies, and, of course, was hacked.

And such concerns aren’t that far fetched—Koebler also wrote about OpenSNP, an open source genetic database that has collected about 7,500 genomes over the past 14 years, that recently shut down because of growing concerns about the country’s fascist lurch:

“I’ve been thinking about it since 23andMe was on the verge of bankruptcy and been really considering it since the U.S. election. It definitely is really bad over there [in the United States],” Greshake Tzovaras told 404 Media. “I am quite relieved to have made the decision and come to a conclusion. It’s been weighing on my mind for a long time.”

Greshake Tzovaras said that he is proud of the OpenSNP project, but that, in a world where scientific data is being censored and deleted and where the Trump administration has focused on criminalizing immigrants and trans people, he now believes that the most responsible thing to do is to delete the data and shut down the project.

Who else might be interested in your genetic data? Would you be surprised to learn that professional phrenologists like Charles Murray, who suggested that one of his billionaire friends should buy it for him. Joke or not, there are 1488 reasons why Murray might want access to the genetic data of millions of people.

As Quinn Slobodian and Stuart Schrader write in 2018 for The Baffler, Murray has spent the past few decades looking for data to prove that "equality was elusive because it was impossible" given racial groups "wee unequal in their endowments and would remain so indefinitely." Murray's diligent massaging of data in The Bell Curve didn't lead to us abandoning the "egalitarian premise" quite like he hoped, but perhaps troves of genetic data in the right hands might do the trick. Perhaps we might be able to use science to show the cruel but sober rationality of his pleas for "social apartheid" or a "high-tech and more lavish version of the Indian reservation for some substantial minority of the nation's population, while the rest of America tries to go about its business."

Slobodian dives a bit deeper into the influence of Murray’s academic racism in a later paper titled “The Unequal Mind” and the role genetic determinism—especially when advanced by phrenologists interested in gutting social programs—played in slashing and burning away at the welfare state. Consider this:

An irony of the revival of racial science to oppose the welfare state is that the welfare state was designed, in part, to address fears of the degeneration of the race. The modern response to fears of degeneration or the deteriorating genetic quality of a population was to increase state intervention, including through public programs of nutrition, maternal training, public health, child benefits, family planning, and access to birth control. In extreme forms, this entailed forms of negative eugenics, including sterilizations of criminals and the mentally ill and, eventually, the extermination policies of Nazi Germany.

The question for phrenologists, then, is how do you open the public’s third eye so that they realize the eugenic state, not the welfare state, is the answer to all our problems? How do you naturalize "a racial, ethnic, and gendered hierarchy of ability" as part of a larger campaign to purge society of egalitarianism?

This shit has always been junk science. Genetic data’s real value is not in discovering new drugs or gene therapies, nor in revolutionizing primary care, nor personalizing medicine, nor reducing the cost of health. The real value of genetic data is not as a commodity or a business model of its own. The real value is as an input to existing models (e.g. advertising) or reactionary projects (e.g. bolstering police or immigration authorities in a fascist polity) or undermining public empathy for others (e.g. naturalizing hierarchies that justify coercion or domination or exploitation), all as part of the desperate attempt by the least among us (skull measuring freaks, apartheid lovers, libertarians ghouls, free market jihadis, new fusionists, etc.) are undertaking to save capitalism by purging it of recent half-hearted reforms in response to social movements over the years.

In the aforementioned essay, as well as his forthcoming book “Hayek’s Bastards,” Slobodian hammers this point home well but I’ll close this out with one more quote:

All new fusionists see the welfare state as the motor of dysgenesis. The reason for this is threefold. First, it operates on the principle of equality of outcomes as well as of starting points, an unrealistic goal in a world of deeply divergent human capabilities. Second, it institutionalizes incentives that subsidize the multiplication of the mentally inferior; those unable or unwilling to find gainful employment are (supposedly) rewarded for reproduction through child benefits. Third, the provisions of the social state act as a magnet for similarly low-intelligence immigrants from populations that are already below average white intelligence, namely, all nonwhite and non-Asian populations. The attraction of low-intelligence immigrants is a special problem as all three thinkers share the conviction that economic structural change is making intelligence more important than ever.

So, genetic data has some real value. In and of itself, genetic data doesn’t seem capable of consistently yielding gold for the firms dedicated to mining it. But it offers the ability to bolster existing regimes of extraction (advertising, insurance, behavior modification, etc.) and the promise of the great white hope that someday, somehow, we will re-legitimize the ancien régime. God willing, these efforts will see the same fate as that old system.