VC’s viral $500K post ignites ‘permanent underclass’ debate

A Menlo Ventures partner’s viral post about retiring after working for top AI firms—and about what $500,000 income means in San Francisco—has triggered an ongoing debate over whether tech is moving toward a “permanent underclass,” or simply accelerating old we

A viral post framed a simple threshold—$500. 000—and San Francisco tech communities immediately started arguing about what it means for anyone who didn’t arrive early to the AI boom.. The worry spreading through the tech ecosystem is that the people left behind won’t just fall behind for a few years. but could get stuck in a “permanent underclass.”

Menlo Ventures partner Deedy Das captured the fear in a viral X post.. He wrote that roughly 10,000 people who worked for companies like OpenAI, Anthropic, or Nvidia can now retire.. In the same post. Das added that “the rest making under $500. 000 can work their whole life and never get there.” He pointed to a “permanent underclass” that has circulated as a meme in tech circles. used as both warning and shorthand as people debate how AI will reshape the economy.

Das’ framing didn’t stay inside theory for long—San Francisco’s own culture turned it into a culture-war target. Founder Tracy Chou put the phrase on a list of words she said are overused in San Francisco, placing “permanent underclass” alongside terms like “agency” and “taste.”

That pushback became its own reply thread.. Replit product lead Amadeo Pellicce created a list of things to do to “thrive in SF as a member of the permanent underclass. ” including going to therapy. living with others. and spending time with family.. He then added a reminder: “X is not real life.” Pellicce wrote. “There is no permanent underclass. ” and argued that “Labor can always create capital.. All you have to do is make something people want.. AI just accelerates this.”

Other voices moved the debate from place-based banter to a moral objection.. Foundation Capital partner Jaya Gupta wrote that people may not want “everything the so-called overclass receives. ” adding: “They cannot monopolize joy. taste. friendship. beauty. aliveness. or the reasons life is worth living.”

Das, for his part, acknowledged the tone of the backlash and the impatience some people expressed.. He said some reactions amounted to some version of “quit your whining” or “touch grass.” His response was personal and direct: “The anxiety everyone feels is real. both in the Bay or outside of it.” He wrote. “This is just a side-effect of capitalism. ” and said new technology tends to bring “increasingly faster adoption rates and thus increasingly faster rates of wealth building.”

A former Facebook product manager and “Chaos Monkeys” author. Antonio García Martínez. said Das’ post captured San Francisco’s “ruthless boom/bust. winner-take-all competition.” Other Bay Area supporters pushed back with their own prescriptions for local life.. Notion marketer John Hurley fought back with a list of beautiful things you can do in the city. including “Be deeply grateful for the heavenscape you live in.” Tech PR Ed Zitron also dismissed the idea on X. writing: “Drive out to the Redwoods. breathe in the air.”

But beneath the memes, multiple commenters said career risk is still the center of the unease.. The discussion also folds in competing predictions about what AI will do to employment and daily economics.. The piece points to Anthropic CEO Dario Amodei saying AI could become a “white-collar bloodbath. ” and notes that layoffs are often blamed on AI.. It also highlights speculation that AI might eventually make universal basic income the default outcome. and it points to a decline in Americans’ sentiment for AI data center development.

The argument has a timing element too.. One user posted a clip of ex-Google CEO Eric Schmidt’s commencement speech. in which graduates booed when he referenced AI. and the comment that followed said. “These kids are embracing the permanent underclass.” Another user wrote that the permanent underclass is real but said non-tech people should ignore it. arguing: “What SF people consider ‘permanent underclass’ means something very different than in the rest of the country.” They continued: “But it means ‘relative permanent underclass. ’ and it is real.”

Das’ post was specifically about San Francisco. and even some people living there framed the concept as relative rather than absolute.. Another commenter wrote that AI was both minting checks and threatening the “safe path. ” and they noted: “You could sit out the dot-com boom & keep your accounting job.”

Kierra Dotson. author of The Data Digest. suggested there is a middle ground between dismissing the fear and accepting it fully.. She wrote: “I think there’s a lot of room between believing you’re free of money from money problems and about to be in the permanent underclass(severe).” She added: “Homes being expensive in the Bay Area is nothing new(esp during the COVID peak) and the median salary is $136k. ” and then added: “Has the goal post moved?. Absolutely.. Are these people in golden handcuffs?. Probably. ” while arguing “they have many more options than they think they do and expectations will have to be reworked…which is something we are all waking up to.”

In his text, Das urged patience. “If you look at the people who were the biggest beneficiaries of the AI era, it is people who were diligently doing research since 2013/4, when their skills weren’t ‘hot,’” he wrote. “Patience is underrated.”

Meanwhile, the social media debate kept narrowing toward day-to-day economics.. One user wrote: “you are in the permanent underclass if you can’t afford the AI subscriptions.” Another kept the dispute grounded in older booms. saying “the safe path” disappeared in a way they said didn’t happen during previous technology booms.

The pattern running through the responses is consistent: Das’ $500. 000 line and “permanent underclass” label triggered immediate counters—from lists of ways to “thrive in SF” to denials that the term describes any fixed reality—while other posts tried to translate the meme into concrete career fears. home affordability. and what people believe AI will do next.

Das’ final message points to patience rather than panic. but the sheer speed of the reactions—Chou’s “overused” word list. Pellicce’s “X is not real life” rebuttal. and the back-and-forth about whether this is local to San Francisco or broader—has made the idea of a permanent underclass feel less like a phrase and more like a live dispute about who gets to profit as AI spreads.

Menlo Ventures Deedy Das permanent underclass San Francisco AI economy venture capital wealth disparity OpenAI Anthropic Nvidia Replit Tracy Chou