How do Silicon Valley bosses take sides in the US election?
2024-07-17
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For these Silicon Valley tycoons who have made political shifts, they pay more attention to the policies of a party rather than the quality of a person.
By Wei Cheng, special contributor to Caijing, from London
Editor | Jiang Wei
On July 13, 2024, shortly after former US President Trump was shot, the famous American entrepreneur Musk posted a video on his own social media X (formerly Twitter) showing Trump raising his fist and shouting "fight!" after his right ear was injured, with the following text: "I fully support President Trump and wish him a speedy recovery."Two days later, on July 15, Trump was officially confirmed as the party's presidential candidate at the Republican National Convention, and he chose Ohio Senator Vance as his vice presidential running mate. Musk immediately tweeted: "Trump-Vance, full of victorious echoes."However, Musk has not always been a supporter of the Republican Party. In the two US elections in 2016 and 2020, he supported Trump's rivals, the then Democratic presidential candidates Hillary and Biden. Before that, he also supported another Democratic presidential candidate Obama.Musk isn’t the only Silicon Valley entrepreneur to take a political turn, either.Silicon Valley has long been regarded as the Democratic Party's stronghold, and only a handful of Silicon Valley entrepreneurs have donated to the Republican Party. But now, many technology industry leaders, including former Facebook executive Palihapitiya and Oracle co-founder and chairman Larry Ellison, have begun to make a political "turnaround" either publicly or quietly.After Trump's assassination, Bill Ackman, the famous hedge fund billionaire and CEO of Pershing Square Capital Management, tweeted on X: "A divided America is a weak America. Let's help Trump succeed and unite the country."Ackman donated $1 million to support Democrat Dean Phillips' challenge to Biden for the Democratic presidential nomination at the beginning of this year. After Trump's "survival", Ackman officially announced that after "a period of reflection", he decided to turn to support Republican presidential candidate Trump.David Oliver Sacks, one of the most successful entrepreneurs and angel investors in tech history and a Trump supporter, praised Trump’s decision to choose Vance as his running mate on X. Sacks also spoke at the Republican National Convention in Milwaukee on July 15.However, Sachs said in 2021 that Trump's incitement of supporters to storm the Capitol disqualified him from being a presidential candidate in the future. Just three years later, Sachs changed his view. In June of this year, Sachs hosted a fundraiser for Trump at his home in San Francisco, where Vance was also present, encouraging attendees to donate generously to Trump's campaign.In June this year, a group of Musk's entrepreneur friends in Silicon Valley helped establish a pro-Trump fundraising group, the America PAC.According to people familiar with the matter, the donors who founded the U.S. political action committee are all wealthy technology entrepreneurs in Musk's social circle. They are closely connected and often provide funds for each other's startups, charitable projects and political candidates they support together.In its first public statement to the media, the American Political Action Committee criticized the Biden administration's policies on inflation, debt and border issues: "We believe that if Biden governs for another four years, it will pose a serious threat to the financial stability and national security of the United States."One of the leaders of the PAC is Joe Lonsdale, a close political ally of Musk and co-founder of software company Palantir. Lonsdale played a key role in the PAC's fundraising efforts in its first few weeks, convincing other influential entrepreneurs in his social circle to donate in addition to his own company's $1 million donation.A public document shows that the group has raised more than $8.7 million since its inception, including $1 million each from several Silicon Valley investors who have made a "political turn" and publicly supported Trump in recent weeks.A U.S. political action committee leader reportedly told a friend this spring that a mysterious large donor would make four donations to the U.S. political action committee during the 2024 U.S. presidential campaign, totaling $160 million. The friend, who requested anonymity, was not informed of the identity of the large donor.The entrepreneurs who donated the most to PACs in the early days of the organization included several influential conservatives in Silicon Valley, as well as some former liberals who had recently completed their "political transformation." For example, Antonio Gracias, a private equity tycoon and director of SpaceX, donated $1 million; Ken Howery, an early executive at PayPal, also donated $1 million; and Sean Maguire, a partner at venture capital giant Sequoia Capital, donated $500,000.The power of example is infinite. Keith Rabois, managing director of Khosla Ventures, recently told the media that he would also donate $1 million to support Trump.It is said that Musk himself will also donate huge sums of money to Trump. On July 15, the media reported that Musk expressed his intention to donate $45 million per month to the US Political Action Committee. Although Musk denied the report, people familiar with the matter said that Musk did intend to donate to Trump.“There’s going to be a former tech venture capitalist in the White House!”It is particularly worth mentioning that Vance, Trump's choice of vice presidential candidate, has worked in Silicon Valley for a period of time and has extensive connections with elites in the technology industry. Trump's selection of Vance will not only help him to build closer ties with Silicon Valley, but also help raise funds for his campaign.Vance was once a venture capitalist in Silicon Valley. From 2015 to 2017, Vance worked at Mithril Capital, a San Francisco venture capital fund founded by Peter Thiel. Later, he worked at Revolution, a venture capital fund founded by AOL CEO Steve Case.In 2020, Vance founded his own venture capital firm Narya Capital with the support of a group of Silicon Valley bigwigs. At that time, Vance's supporters included his former boss Thiel, Marc Andreessen, co-founder of venture capital firm Andreessen Horowitz, startup investor Scott Dorsey and former Google CEO Eric Schmidt.Documents from the U.S. Securities and Exchange Commission (SEC) show that Vance's venture capital firm Narya Capital is headquartered in Cincinnati, Ohio, and will manage approximately $200 million in assets in 2023. Its goal is to bring more Silicon Valley funds to U.S. cities that are underinvested in technology.In 2022, when Vance ran for the U.S. Senate, his former boss Thiel donated him $15 million.Jacob Helberg, an executive at software company Palantir, said after learning that Vance was chosen by Trump that Vance was familiar with and close to Silicon Valley and was a good choice. Helberg has also donated a large sum of money to Trump.Derian Asparukhov, a partner at venture capital firm Founders Fund, also said jubilantly: "There will be a former tech venture capitalist in the White House!"“Rather than liking Trump, I hate Biden.”It is generally believed that the Democratic Party is backed by technology giants, Wall Street financial groups and big media, while the vast majority of Trump's supporters are laid-off workers abandoned by the times in the American industrial rust belt and "rednecks" doing rough work in agricultural areas. Business people either dislike Trump's populist economic policies, or feel that some of Trump's policies are beneficial to them but are ashamed to publicly support him. This is especially true in Silicon Valley, which has long been considered one of the most liberal regions in the United States. Silicon Valley technology giants have always had a closer relationship with the Democratic Party due to their closer positions on issues such as immigration, innovation support, and diversity.However, the situation has changed a lot now: on the one hand, many Silicon Valley bigwigs are disappointed with Biden's stance on regulation and tax policies, so they are beginning to lean to the right politically; on the other hand, Trump has begun to extend an olive branch to Silicon Valley liberal entrepreneurs and venture capitalists, promising to cut taxes on businesses and support the cryptocurrency industry.More importantly, since both Trump and Biden have a long record in office, Silicon Valley entrepreneurs can compare the two's performance in office to see who will be more beneficial to them in the next four years.During his presidency, Trump implemented a massive tax cut policy that benefited the wealthy, essentially reversing the trend of rising tax rates during the Obama era. In contrast, many Silicon Valley entrepreneurs hate the tax and regulatory policies under Biden. For example, Lonsdale, co-founder of the aforementioned software company Palantir, said: "From the shameless plan to transfer $1 trillion or more in student loan debt to working-class taxpayers to the cynical idea of providing $10,000 for first-time homebuyers, Biden has proven that he is willing to use some people's money to buy other people's votes. Biden has depleted the strategic oil reserves in an attempt to lower fuel prices. Instead of expressing remorse for bad policies that have caused inflation, he blames CEOs and businesses."Because Silicon Valley tycoons are richer than entrepreneurs in other industries, they are more sensitive to Biden and Trump's tax policies. They originally expected the Biden administration's tax policies to be more moderate, but the situation is exactly the opposite: Biden once called for a 25% billionaire tax on any personal assets worth more than $100 million (not just their annual income or capital gains) in his State of the Union address; Biden also plans to increase the corporate income tax rate from 21% to 28% and cancel the Trump-era tax cuts for the rich.Many Silicon Valley bigwigs believe that if Trump is re-elected, they will pay less taxes and their companies will face less regulation than if Biden is re-elected. Others believe that if Trump is re-elected, he will push for the 2017 Tax Cuts and Jobs Act to take effect permanently, reducing the corporate tax rate from 35% to 21%.In addition, the Biden administration has aggressively intervened in Silicon Valley's mergers and acquisitions and investment activities during the past four years in office, and has been more proactive in implementing antitrust interventions against technology giants, which has made some Silicon Valley bosses very unhappy. They believe that if Trump returns to power, he may relax supervision of technology lawsuits.The angel investor Sachs mentioned above once explained the change in his political orientation in this way: "Voters have experienced four years of President Trump and four years of President Biden. In the technology industry, we call it A/B testing. In terms of economic policy, foreign policy, border policy and legal fairness, Trump performed better."However, in general, many Silicon Valley technology companies located in California, the Democratic Party’s stronghold, are more likely to resonate with the progressive Democratic Party in terms of political inclinations and values, so most entrepreneurs will still support the Democratic Party. However, due to the above reasons, there are more and more Silicon Valley bigwigs like Musk who have achieved a certain political shift. More importantly, among these people who have made a political shift, more and more people are no longer making a sneaky shift like they did four years ago, and are not ashamed or embarrassed to admit that they will vote for Trump like they did eight years ago, even though Trump seems to have more "bad deeds" today: he once encouraged supporters to storm Congress, was found guilty in the "hush money" case, and has more lawsuits waiting for trial, etc. But for these Silicon Valley bigwigs who have made a political shift, they pay more attention to the policies of a party rather than the quality of a person.Biden is unpopular even among liberal Silicon Valley entrepreneurs who have not changed their positions. Earlier this year, some technology leaders, including OpenAI CEO Altman and Pershing Square CEO Ackman, raised millions of dollars to support Biden's Democratic primary rival Phillips. After Biden performed poorly in the first debate with Trump, some major Democratic donors froze nearly $100 million in donations, and Democratic supporters of Silicon Valley technology companies were also very disappointed with Biden.There is a sentence in a recent report in Wired, a famous American science and culture monthly magazine, which accurately summarizes the overall political mentality in Silicon Valley today:"Venture capitalists of different political positions now have a consensus: Silicon Valley hates Biden more than it likes Trump."
