Beware Silicon Valley’s 2012 Nostalgia

One of the stories to come out of last month’s Republican National Convention was about a small but growing faction of powerful figures in Silicon Valley lining up to support Donald Trump, signaling a political realignment in one of the country’s most historically liberal enclaves. 

At the center of this narrative is Elon Musk, who consummated years of veering to the right by “fully” endorsing Trump shortly after the assassination attempt in Pennsylvania. The Tesla CEO was joined in short order by tech venture capitalists Marc Andreessen, Chamath Palihapitiya, David Sacks and others. A month earlier, Sacks and Palihapitiya had held a $300,000-a-plate fundraiser for Trump at Sacks’s Pacific Heights mansion that raised upwards of $12 million for the candidate. In attendance alongside around 50 “technology executives” and other wealthy donors was Ohio senator and soon-to-be vice-presidential candidate JD Vance. According to The New York Times, Trump informally polled the room. Almost everyone said Vance. The MAGA movement’s new Tech Caucus was euphoric when Trump announced the Ohio senator as his running mate. 

At the time of the convention, some viewed this outpouring of support for Trump as proof that Silicon Valley had shifted from the liberalism of the Obama years to a more reactionary brand of politics closer to the VC community’s most famous “contrarian,” Peter Thiel. The excitement surrounding the choice of Vance, who has echoed many of his mentor’s more extreme ideological positions, reinforced this view. 

But contrary to these speculations, it has become clear in recent weeks — and especially since Kamala Harris replaced Joe Biden as the presumed nominee — that Silicon Valley as a whole has not undergone a major ideological transformation and remains generally supportive of Democrats. Most techies have not followed Musk to the right (or to Texas), undermining the narrative of MAGA conquering Silicon Valley.

It is true, however, that the tech world’s top luminaries have grown increasingly frustrated with the Biden administration’s more populist approach toward the economy and corporate power. The administration’s aggressive enforcement of antitrust laws and push for raising taxes on corporations and the wealthy, in particular, had left many wealthy tech-adjacent donors ambivalent about supporting the president. 

This disillusionment turned into excitement upon Harris becoming the presumptive nominee. “A lot has changed in 48 hours,” posted the founder and CEO of cloud company Box, Aaron Levie, who observed a “real momentum shift in Silicon Valley” since Harris entered the race. The CEO also offered some advice to the presumptive Democratic nominee, urging her to adopt “a more pro business, pro tech, and less chaotic platform that works for the 21st century.” 

In the week since Harris effectively secured the nomination, there have been clear signs that she is at least open to following this advice. Harris and her advisers have reportedly reached out to business leaders to “build bridges” and ease some concerns among those in the donor class about her administration’s stance toward issues such as antitrust and new technologies, such as crypto. According the The New York Times, Harris has been privately critical of some of the Biden administration’s more populist policies, expressing “skepticism” to donors about the “expansive view of antitrust powers” held by Biden officials such as FTC chair Lina Khan and the assistant attorney general of the Department of Justice antitrust division, Jonathan Kanter.

Harris’s allies in the business world have been eager to paint the Democratic candidate as a conciliatory figure toward business, insisting that she would be more “approachable” than her predecessor. This outreach already seems to be paying off. Within days of her entering the race, some of the country’s wealthiest individuals from Wall Street and Silicon Valley have re-opened their checkbooks for the Democratic candidate. This includes $7 million donations from both Netflix founder Reed Hastings and LinkedIn founder Reid Hoffman. Hoffman has reportedly been on a fundraising blitz with other Democratic megadonors, such as venture capitalist Ron Conway, attempting to rally their fellow tech elites — including some who have already endorsed Trump — to get behind Harris. The effort appears to be working. On Wednesday, more than 100 venture capitalists signed a pledge of support for the vice president. “We are pro-business, pro-American dream, pro-entrepreneurship, and pro-technological progress,” reads a statement published on the website VCsForKamala.org above a number of prominent names such as Mark Cuban and Vinod Khosla.

It is no secret how this group aims to shape the Harris campaign and possible administration. Most immediately, they want Khan and Kanter replaced. 

“Lina Khan is … a person who is not helping America,” opined Hoffman last week on CNN, saying that he “would hope that Vice President Harris would replace” the FTC chairwoman (Hoffman sits on the board of Microsoft, which has faced intense scrutiny from the agency under Khan’s leadership). IAC and Expedia chairman Barry Diller, whose company is under investigation by the FTC, echoed these sentiments on CNBC, saying he would lobby Harris to drop Khan, who he called a “dope.” These donors will probably push the Harris camp on a number of other issues as well, from taxes to regulation. Over the weekend, the Financial Times reported that the Harris camp had reached out to crypto companies in an attempt to “reset” relations with the scam-ridden industry. 

In public, Harris remains committed to the core tenets of Bidenomics and has declared that “building up the middle class will be a defining goal of my presidency.” She has also touted many of the Biden administration’s accomplishments and vowed to continue important work such as capping drug prices and banning junk fees (a rule currently being enacted by Khan’s FTC). But if reports of private conversations between the Harris campaign and donors are accurate, there is legitimate reason to worry that a Harris administration would pivot away from Biden’s more adversarial approach toward corporate America. 

What is most striking about the political divisions between camps in Silicon Valley’s elite is not how different they sound, but how very similar. Indeed, the general sentiment among techies in both political camps is that they have not changed, the parties have, particularly the Democrats. “The Democratic party I knew under Obama doesn’t exist anymore,” said venture capitalist Shervin Pisheva, who was once a major donor and bundler for Obama and Hillary Clinton. In 2016, Pisheva called for California to secede from the United States after Trump’s election, but today he is all-in on MAGA due to the alleged anti-business “activists” who run agencies like the SEC and FTC. 

It is perfectly true that the Democratic Party of today is not the Democratic Party of 2016, let alone 2010. And for prominent techies such as Levie supporting Harris, this is exactly the problem. “We should bring back this Democratic Party,” wrote Levie in a post on X last week showing a picture of President Obama walking with Elon Musk at a Space X plant back in 2010. (Levie seems to forget that Musk is also no longer the person he was a decade ago). One of the most common refrains from Silicon Valley elites since Harris became the presumptive nominee is their hope that the Democratic Party might revert to its embrace of neoliberalism and deference to the leaders of companies such as Google and Amazon, which grew into the big tech behemoths they are today during the Obama years. 

The Obama administration had an especially close relationship with Google. In 2013, it decided not to prosecute the company for antitrust violations, and for eight years Google representatives routinely attended White House meetings more than once a week. Almost 250 people, meanwhile, rotated between the search engine giant and the Obama administration in a revolving door. Many of Obama’s top officials would go on to thrive elsewhere in Silicon Valley. His 2008 campaign manager and senior adviser David Plouffe joined Uber in 2014. Obama press secretary Jay Carney is now a top executive at Amazon.

In stark contrast to the lovefest of the Obama years, the Biden administration has been more adversarial toward Big Tech. It has aggressively pursued antitrust cases and sued Google, Apple, META and Amazon for alleged monopolistic behavior.  It has blocked acquisitions such as the attempted merger of book publishers Penguin Random House and Simon & Schuster and Microsoft’s purchase of game developer Activision. The blocking of acquisitions has especially irked VCs looking to cash out on their investments. Investors Andreessen and Ben Horowitz, who manage one of the biggest VC funds in Silicon Valley and endorsed Trump on their podcast last month, claimed the Biden administration’s refusal to meet with them to discuss cryptocurrency and other tech-related issues is one of the main reasons for their drift to Trump. The “final straw” for the investor duo, however, was the Biden administration’s proposal this year to levy a 25 percent tax on unrealized gains for individuals worth more than $100 million, otherwise known as the “billionaire’s tax.” Under a second Trump administration, plutocrats such as Andreessen and Horowitz would not have to worry about a “billionaire’s tax” and would probably see their tax bill decline even further. 

If the story coming out of last month’s RNC was how leaders in the tech world and VC community were lining up behind Trump, one of the big stories at the Democratic convention this month could be how Harris retook their allegiance. But the real question is whether winning over the support of billionaires is worth what they want in return. If it means reverting to the neoliberalism of the Obama and Clinton years, then the answer should be obvious. It was the deference that the previous Democratic administration showed toward Wall Street and Big Tech companies that helped fuel the explosion of populism a decade ago in the first place. How quickly some Democrats forget when the donor class starts throwing record sums around.  

In 2016, the tech industry was almost universally supportive of Clinton, as was most of the billionaire class. At the country’s biggest technology companies — Apple, Alphabet, Microsoft, Facebook and Amazon — employees gave about 60 times more to Clinton than they did to Trump. But this support from Silicon Valley and other affluent parts of the country was a double-edged sword for Clinton. While her campaign raised nearly twice as much money as her opponent’s, the overwhelming support from many of the richest people in America also played into Trump’s populist messaging. Clinton was the establishment pick, while Trump was the champion of the “forgotten man and woman” of America — and the political donations proved it. 

Eight years later, Trump can no longer claim to be standing up to the donor class. Instead, he is selling his future administration to the highest bidder, courting billionaires and CEOs and promising to do their bidding in Washington. If Harris is to expose Trump’s populist message as the farce that it is, she must not only call out Trump’s corrupt bargain with the donor class, but take a brave stand against it.