In Silicon Valley, the heartland of US innovation that has long been considered a bastion of liberal beliefs, Donald Trump’s victory in the 2016 presidential election provoked despair.
“This feels like the worst thing to happen in my life,” wrote Sam Altman, the co-founder of OpenAI, on X.
“The horror, the horror,” said venture capitalist Shervin Pishevar, an Uber investor who made a call for California to secede from the US.
Summary
- Initial Reaction: Silicon Valley’s initial reaction to Trump’s 2016 victory was overwhelmingly negative.
- Changing Sentiment: Eight years later, influential technologists are now supporting Trump.
- Key Supporters: High-profile endorsements from Elon Musk, Marc Andreessen, Ben Horowitz, and others.
- Economic Motives: Lower taxes and deregulation are primary motivators.
- AI and Tech Regulation: Concerns over current administration’s tech policies drive support for Trump.
- Crypto Interests: Trump positions himself as the “crypto president”.
- Cultural Shift: Changing attitudes toward immigration and “wokeness” influence tech leaders.
- Wider Movement: Growing acceptance of Trump in Silicon Valley signals a potential broader shift.
The New Wave of Support
Eight years on, the mood has changed. An influential segment of Silicon Valley’s wealth and power is now lining up behind Trump to win the White House in November alongside his vice-presidential candidate, JD Vance, a former venture capitalist who lived in San Francisco for almost two years.
Over the past few weeks, an unfolding cast of prominent technologists have declared their newfound support for Trump, with momentum growing even faster since the attempt on his life on July 13.
“I fully endorse President Trump and hope for his rapid recovery,” Elon Musk wrote on X, the platform he owns, just 30 minutes after the shooting.
Two days later, Marc Andreessen and Ben Horowitz, early internet pioneers whose venture capital firm controls $35bn, threw their backing behind the Trump-Vance ticket.
And Keith Rabois, an early executive at PayPal and LinkedIn, who in 2016 called Trump a “sociopath,” pledged $1mn to his campaign.
“Biden is the worst president of my lifetime,” the Khosla Ventures managing director now tells the Financial Times.
Key Supporters and Their Motives
They joined a slew of Silicon Valley investors like Chamath Palihapitiya and David Sacks, hosts of the “All-In” tech podcast, and Sequoia Capital partners Doug Leone and Shaun Maguire, who had publicly backed Trump weeks earlier.
All of them have made, or are planning to make, large donations to a new pro-Trump political action committee led by Joe Lonsdale, the co-founder of software giant Palantir Technologies and venture firm, 8VC.
Pishevar, far from hoping California would leave the union, has instead moved himself and his business to Miami, Florida, and become a Trump supporter. “The Democratic party I knew under Obama doesn’t exist anymore,” he says, in an interview at the Republican National Convention in Milwaukee.
“The shift in Silicon Valley is indicative of the recognition that the Republican party has become much more open to grand ideas to really rebuild America and embrace tech and innovation.”
The Remaining Liberal Stronghold
Yet the shift is far from universal in a sector, and location, that is still overwhelmingly a Democratic stronghold.
Around 80% of donations from internet companies have gone to Democrats so far in this election cycle, according to Open Secrets (though that has dropped from 90 percent in 2020), and Big Tech veterans like Microsoft board member Reid Hoffman are still backing President Joe Biden and have urged peers to do the same. In San Francisco, only 9% of people voted for Trump in 2016, rising to 13 percent in 2020.
Some of San Francisco’s lifelong Democrats believe the trend is being overplayed, the work of a small number of influential figures with big megaphones.
“It’s a handful of West Coast financiers doing what Wall Street bankers have long done — feathering their nests,” says Michael Moritz, the billionaire former leader of Sequoia Capital. “They represent Silicon Valley about as much as the traditional Wall Street types represent the Bronx.”
Industry Insights: Political and Economic Implications
What happens in this wealthy enclave of the United States is hardly representative of the rest of the country. But the divide here reflects political rifts being felt nationally, as friends and co-workers disagree over whether a second Trump term represents a threat or an opportunity.
Moritz’s views are at fierce odds with his colleagues, Leone and Maguire. Hoffman was part of the founding team of PayPal — alongside Musk and Sacks and longtime Trump donor, Peter Thiel. Lonsdale and Thiel’s Palantir co-founder and chief executive, Alex Karp, is a major Biden donor.
At the same time, the willingness of some of Silicon Valley’s best-known wealth creators to back Trump exposes how parts of the technology industry feel the Democrats have failed to help them thrive.
“People who innovate are fleeing. It is an intellectual mistake that the progressive wing doesn’t engage,” says Karp. “I personally am not thrilled by the direction [of the Democratic Party], but how far can they go before I reconsider? I am voting against Trump.”
Economic Motives and Regulatory Concerns
The reasons for the shift are as commercial as they are ideological.
Silicon Valley’s Trump supporters are betting the former president will lower their tax burden and boost their business profits. Many of them are desperate to avoid Biden’s plan to tax unrealized capital gains at 25% for individuals whose wealth is over $100mn.
The tax would “absolutely kill both start-ups and the venture capital industry that funds them,” Andreessen Horowitz posted on its website last week.
Competition regulators have clamped down on tech companies in recent years, forcing Big Tech into years of paralysis on mergers and acquisitions, and starving venture-backed start-up companies of lucrative exit deals.
Lina Khan, chair of the Federal Trade Commission, and Jonathan Kanter, the assistant attorney general for antitrust at the Department of Justice, have targeted tech monopolies, going after Amazon, Meta, Google, Apple, and others in the courts.
Rapid developments in artificial intelligence in the past 18 months have made this a particularly pressing problem for tech companies. “We are on the edge of an AI surge that will make the dotcom boom look like spring break,” says Boris Feldman, co-head of Freshfields’ global tech practice, who advises multiple “magnificent seven” tech companies.
“Tech CEOs are concerned that, because of Khan’s obsessive hostility towards major tech companies, [the FTC] will be willing to impede developments in AI, placing us at a competitive disadvantage to non-western countries.”
Trump’s Tech Policies and AI Regulation
Trump is unlikely to go soft on tech monopolies, and indeed his running mate Vance has been vocal on his desire to rein in Big Tech. But the sense in tech circles is that a Republican administration will not be nearly as anti-merger as the current government.
On top of that, both Trump and Vance, who invested in dozens of fledgling AI companies at his firm Narya Capital, have positioned themselves as strong skeptics of regulating AI. Looser regulation would be a particular boon for the founders and backers of AI start-ups.
“American technological pre-eminence lives or dies on the fate of whether start-ups can succeed,” said Andreessen last week, explaining that his venture firm’s “little-tech” agenda was at the root of his decision to support Trump.
Andreessen Horowitz has another major financial interest in championing Trump: cryptocurrency. Trump has pitched himself to tech executives as “the crypto president” and he plans to make a speech, in person, at a major Bitcoin conference in Nashville later this month. The price of Bitcoin surged immediately following the assassination attempt on Trump, with crypto investors increasing their bets he would win.
Andreessen Horowitz has an $8bn bet on crypto, making it one of the largest crypto investors in the world. But it has had to fight to influence US politicians as the crypto industry faces heightened scrutiny from regulators after the collapse of crypto exchange FTX and the conviction of its founder, Sam Bankman-Fried, for embezzling customer funds.
Gary Gensler, the chair of the Securities and Exchange Commission, has been an “existential threat” for crypto investors, Feldman says. “They must get him out. They will spend whatever it takes to accomplish that.”
Ideological Shifts in Silicon Valley
There are ideological reasons behind the shift, too. Silicon Valley’s culture over the last two decades became defined by progressive attitudes that aimed to root out social injustice, with tech giants adopting mottos such as Google’s “Don’t Be Evil”, Meta encouraging employees to challenge its management on company issues, and tech workers forcing their employers to veto government defense contracts on moral grounds.
Over time, that has changed. Google ditched its motto in 2018 and Meta started restricting political speech by staff in 2020. Growing geopolitical tensions between the US and China and Russia’s invasion of Ukraine have pulled tech giants such as Google back into government work on defense programs — and employees are told to leave if they don’t like it.
Immigration and Cultural Concerns
One of the most obvious divides in tech industry culture used to be Trump’s stance on immigration. Half of start-ups valued at $1bn or more were started by immigrants.
Any proposal to “choke off” immigration “makes me sick to my stomach,” said Andreessen in 2016 in a direct response to Trump. But an immigration crisis at the US-Mexico border has fueled some of the tech swing to Trump since# Silicon Valley’s Shift: From Liberal Stronghold to Trump Support
The Broader Implications
A Divided Tech Community
While the trend of tech support for Trump is significant, it is not universal. The tech industry remains predominantly Democratic, with substantial donations still flowing to Biden.
However, the increasing acceptance of Trump among Silicon Valley’s elite could signal a broader political realignment within the industry.
Strategic Political Calculations
Silicon Valley’s power brokers are strategically aligning with Trump, anticipating his potential victory in the upcoming election. This alignment is not only about ideology but also about securing influence and access in a potentially new administration.
Big Tech’s top executives have largely remained silent, but indications of a broader shift are emerging. On July 12, Meta lifted the restrictions it had imposed on Trump’s Facebook and Instagram accounts following the January 6, 2021, attack on the U.S. Capitol.
Mark Zuckerberg, Meta’s founder and CEO, described Trump’s immediate reaction to the shooting as “badass,” though he emphasized he would not engage in the election himself.
With public support for Trump now more acceptable in Silicon Valley, further endorsements and support from other tech leaders may be forthcoming.
Conclusion
The shifting political landscape in Silicon Valley, marked by a growing number of tech leaders endorsing Donald Trump, underscores a significant ideological and strategic transformation. This trend reflects both disillusionment with the current Democratic administration and a pragmatic alignment with a potential Trump presidency.
As the tech industry grapples with regulatory pressures and evolving market dynamics, the support for Trump highlights a complex interplay of commercial interests, political beliefs, and strategic positioning.
The emergence of this new political alignment in Silicon Valley could have profound implications for the broader tech industry and the future of innovation in the United States.
With influential figures like Elon Musk, Marc Andreessen, and Keith Rabois leading the charge, the tech community’s political affiliations are becoming increasingly diverse and unpredictable. This evolution not only reflects the changing priorities and concerns of tech leaders but also signals a potential shift in the industry’s relationship with the government and its role in shaping public policy.
As the 2024 election approaches, the continued support for Trump within Silicon Valley will be a key development to watch. The industry’s response to this political realignment will likely influence the direction of innovation, regulation, and economic growth in the years to come.
