Balaji Srinivasan built Network School as a working prototype of the “network state,” his theory that an internet country of engineers and founders can eventually do the work of a real one. This week a real one reminded him who still holds the passports.
The former Coinbase chief technology officer and Andreessen Horowitz partner said on 15 July that a Malaysian immigration operation at his co-living commune in Forest City, Johor, had put the country’s own ambitions to court mobile tech workers at risk.
He was suspending US$500 million (RM500 million) in planned investment, he added, until residents were assured they would not be treated as illegal immigrants, on top of the more than US$100 million he said was already committed.
The operation itself was brief. On 14 July, officers inspected 266 foreigners from 40 countries at the site, according to figures released by immigration director-general Zakaria Shaaban.
Of those, 256 held social visit passes and 10 held professional visit passes issued under DE Rantau, Malaysia’s digital nomad scheme. Shaaban said every travel document checked out, and that officers found no evidence for the claim that had prompted the visit in the first place.
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That claim, circulated on social media and amplified by pro-Palestinian groups, was that Israeli nationals had entered on second-country passports. Malaysia does not recognise Israeli travel documents, which makes the allegation less a bureaucratic quibble than a diplomatic one.
The idea behind Network School comes from Srinivasan’s 2022 book, which argues that online communities can raise capital, agree on values and eventually win diplomatic recognition, in that order. Forest City was meant to be the physical proof of concept.
Johor’s chief minister, Onn Hafiz Ghazi, had ordered federal agencies in, among them the immigration department, police and customs, to verify identities and licensing. Officials said the broader inquiry, covering land use and education rules, remained open even after the passport question was settled.
Network School, launched in 2024, sells three-month residencies from US$1,500 a month, meals and gym included, and accepts payment in cryptocurrency.
It is the network-state pitch made concrete: a few hundred residents in a half-finished, Chinese-built city that was once planned for hundreds of thousands.
Malaysia has spent the past year courting the industry while also policing it, from data-centre incentives to a customs AI-chip seizure at its main airport.
The Forest City experiment sits awkwardly across that line, a foreign-run enclave the state both invited and now inspects.
DE Rantau, the professional pass 10 residents were holding, is part of that pitch, a nomad visa designed to lure remote workers to exactly this kind of address.
The programme is one of the reasons Forest City was reclassified as a special financial zone, with tax breaks aimed at foreign firms and individuals.
Srinivasan’s response ran to the theatrical. He asked whether “the global tech community” should keep investing in Malaysia, and requested a meeting with Prime Minister Anwar Ibrahim to negotiate a memorandum of understanding.
The talks would be “crucial,” he wrote, if Malaysia “still wants continued global technology investment” and “aspires to become a top 20 global technology hub.”
Should the government prefer otherwise, he offered to reallocate the capital of “billion dollar funds and trillion dollar companies” to other countries instead.
Forest City’s developer, the Chinese group Country Garden, said it would cooperate fully with the ministries involved. Anwar’s office had not responded publicly to the request for a meeting, and the immigration department stuck to its line that the checks were routine and the paperwork sound.
It is an inversion of the usual immigration encounter, in which the state does the asking. Here the resident threatens to leave, and to take the rolodex with him.
As of 17 July no meeting with Anwar had been confirmed, the investment remained on hold, and the passports, all of them found to be in order, were back in their owners’ pockets.
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