How the 2024 election broke Silicon Valley

With a blizzard of tweets, blog posts, public comments and podcasts, the tech industry’s most powerful business leaders provide a continuous commentary on this year’s presidential campaign cycle that’s hard to ignore. Buoyed by hubris and wealth, these billionaires have loudly aligned themselves with their preferred candidate, railed against the opposition and whipped up their personal policy prescriptions — often in heated arguments on social media.

One day, it’s Sun Microsystems co-founder and venture capitalist Vinod Khosla talking to Tesla CEO Elon Musk about Trump’s views on NATO and climate change. Next up is LinkedIn co-founder and venture capitalist Reid Hoffman, who publishes a lengthy post taking apart the arguments made by his fellow “PayPal Mafia” member, venture capitalist David Sacks, for supporting Trump. Even Meta’s Mark Zuckerberg got his toes wet, applauding Trump’s “stupid” punch after the former president survived an assassination attempt.

Silicon Valley’s enormous political contributions have meant Washington is increasingly beholden to these outspoken techies: Since 2022, Hoffman has paid $42.8 million to Democratic PACs and state and federal candidates; Keith Rabois, another VC, put up $9.3 million to work for PACs and Republican candidates; and Peter Thiel of Palantir Technologies and Founders Fund have given $15 million to Republican PACs in Ohio and Arizona (and while he says he’s not dealing with the 2024 election, he was a major influence in the rise of his protégé, JD Vance , to be Trump’s running mate). In June, Donald Trump attended a fundraiser at Sacks’ home in San Francisco. And a Zoom “VCs for Kamala” fundraiser in August attracted 600 people. (For a more detailed breakdown of donations from major Silicon Valley figures, we’ve featured them here.)

It’s all a pretty fun show. But shouldn’t the business leaders who run America’s economy and some of its most valuable companies rise above the fray? Isn’t picking sides in partisan politics bad for business? Corporate influence is nothing new in the political sausage-making process, of course, but whatever the rules are for this sort of thing, tech fans have decided it’s time to throw it out the window.

A new kind of speech

Any call for restraint seems odd today, when so much of what is being said on social media is focused on red meat in the culture war and jubilant provocations. Scroll through Elon Musk’s X feed and you’ll read about “far-left fascists” and conspiracy theories about illegal immigration and voter fraud, along with the occasional AI-generated image of Kamala Harris in a Soviet-era communist uniform .

How did it come to this? Musk’s particular case is probably best left to a qualified professional with insight into the inner workings of the Tesla CEO’s psyche. On a broader level, it is clear that talking about politics, unfiltered, on social media is no longer taboo among a segment of the business elite. And those who normalize this behavior are the tech gurus who created and run these platforms.

The growing influence of Silicon Valley tycoons on American politics is arguably inevitable given the industry’s massive growth. Technology now accounts for 10% of the country’s GDP and about a third of the value of the S&P 500. In other words, running tech companies is no longer just a Silicon Valley business; they are America’s business. And that means politics is inextricably woven.

Big Tech is a political campaign issue in its own right, and not necessarily in a way that looks kindly on the entrepreneurs and corporations that are flaunting the nation’s latest innovations. Years of privacy controversies, online misinformation and crypto fraud have left a mark on the technology.

Federal regulators like the Securities and Exchange Commission’s Gary Gensler, the Federal Trade Commission’s Lina Khan, and the Justice Department’s antitrust chief Jonathan Kanter have taken a hard line on crypto and corporate mergers. Generative artificial intelligence, which has sparked the latest tech gold rush, will bring more control and regulations, many of which are already making their way through state legislation.

“I think there’s a fear of, ‘What’s the government going to do next that’s going to cost us something?’ ” says Floyd Kvamme, former partner at venture capital firm Kleiner Perkins Caufield & Byers and founder of TechNet, a bipartisan lobbying group for senior technology executives.

Even Hoffman, a staunch Democrat, has publicly expressed his hope that if Kamala Harris wins the presidency, she will replace FTC Chairman Khan, whom Hoffman described to CNN as the “war of American business.”

Evolving views

In his 1,000-word tweet endorsing Trump this summer, former PayPal chairman and Facebook chief executive David Marcus, a self-described longtime Democrat, recounted a gradual political conversion caused by everything from “Armed DEI” and suppression of online discussions about the origin of COVID to the US. politics in Russia and the Middle East. “It was an eye-opening process of letting go, grounding lifelong beliefs, and rebuilding from there,” Marcus wrote.

For some who found a new, strong political voice, the reception was mixed. Marc Andreessen and Ben Horowitz, two of the industry’s most powerful venture capitalists, quickly came under fire after endorsing Trump in July, with many liberal techies vowing to cut ties with their firm, Andreessen Horowitz.

“I’m going to have a lot of friends who are probably mad at me for saying something nice about President Trump,” Horowitz admitted at the start of their 90-minute video. “The last thing we wanted for the firm, for our employees, for the companies that we invest in and so on, was to be involved in this, because it gets very emotional and it’s hard.”

Politics has, of course, always had a presence in Silicon Valley. When Andreessen’s web browser company Netscape went public in 1995, CEO Jim Barksdale made no secret of his political leanings. Barksdale was a prominent fundraiser and adviser to Republican George W. Bush’s presidential campaign. He was rumored to be in line for “high-tech czar” in the Bush administration, and was eventually chosen to serve on Bush’s Foreign Intelligence Advisory Board.

But the tone of the emerging tech industry in that era was less dogmatic and maximalist. During the 2000 presidential campaign, Barksdale spoke on a panel and was asked how the Republican Party could use the Internet to win over techies. Discover the “hooks” to go viral, he advised.

He then offered a word of caution, pointing to GOP positions on the environment and “family values” that haven’t played well with the tech set: “Go easy on some of these other things that these people respond negatively to.” .

A culture of iconoclasts

Republican or Democrat, a common thread among the new generation of political tech warriors is that they tend to be founders and venture capitalists rather than professional corporate managers. As former programmers and tech innovators, their experience may better qualify them to discuss Moore’s Law on microprocessors than the intricacies of taxes and regulations, but founders tend to speak their mind. They have managed, often astronomically, to approach life with zeal, yet also combativeness, qualities that they often cannot suppress. (It’s why every business reporter knows they’ll get a much better interview from the CEO who started his own company, rather than the risk-averse employee suit in the C-suite.)

This passion and idealism offers a potential counterpoint to the criticism that Big Tech’s political fervor is motivated only by commercial self-interest: commitment is inherent in the Silicon Valley ethos—it’s what compels founders to persevere when everyone tells them the idea their is bad. or crazy, to devote themselves so completely to pregnancy that it risks destroying their personal finances, marriage, and health. If a founder truly believes that their purpose in life is to make their company, platform, or widget happen, then they will fight to make it happen, pushing back against any obstacle—whether it’s a market incumbent or a regulatory body in a government. agency.

This can become a kind of fanaticism: some of today’s technology elite have come to believe that their mission is so important that it trumps everything else. And in many cases they seem to have lost the ability to distinguish between things that fall within their area of ​​expertise and other spheres of public life, from geopolitics to criminal justice.

Case in point: VC Ben Horowitz opened his Trump endorsement video by saying “the future of our business, the future of technology … and the future of America is literally at stake.”

The cult of the founder

That’s the downside of Silicon Valley’s reverence for tech innovators, which treats startup founders not just as hardworking, passionate entrepreneurs, but as enlightened beings endowed with some kind of superpower. Marc Andreessen’s Netscape web browser was a revolutionary product in its day, one that arguably changed the world. Does this mean he has the answers to all of America’s problems?

This attitude is a big change from that of the business titans of the past. Even the all-powerful “robber baron” industrialists of the late 19th century, Andrew Carnegie and John Rockefeller, tended to stay in their ways, explained David Nasaw, a historian at the Graduate Center of the City University of New York, who wrote a biography of Carnegie.

“Carnegie never said he was a genius,” Nasaw notes. “Rockefeller never said he was a genius. They all said they were good businessmen, that they understood the markets.” Today’s Silicon Valley moguls have more “chutzpah”: “They were convinced they were gods.”

A notable exception in history is newspaper magnate William Randolph Hearst, the subject of another Nasaw biography. Hearst hated President Franklin Roosevelt with a passion and published scathing signature editorials on the front pages of his newspapers—the most powerful platform of his era.

But Hearst’s political activism cost him dearly, causing the readership of his newspapers to decline. “Working-class readers felt they had to make a choice,” says Nasaw. “They ditched Hearst.”

Techies, take note.

Additional reporting by Jenn Brice

This article appears in the October/November 2024 issue of wealth with the headline “How Silicon Valley Hacked the Election.”