Silicon Valley daredevils ride or die with Trump
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Jeffrey Goldfarb
NEW YORK, July 17 (Reuters Breakingviews) -When Steve Jobs paid tribute to “the crazy ones, the misfits, the rebels, the troublemakers” he was thinking Muhammad Ali and Pablo Picasso, who featured in a 1997 Apple AAPL.O ad campaign. Squint, and it’s possible to see how former U.S. President Donald Trump would fit the mold and appeal to a Silicon Valley crowd that exalts those who “have no respect for the status quo.” The flaw in the logic, setting aside that being born into wealth and having Wall Street’s blessing hardly qualify for radical outsider status, is that the stakes in politics are much higher than in sports, art or even investing.
Marc Andreessen and Ben Horowitz, who started their eponymous venture capital firm 15 years ago, became the latest technology whizzes to throw their support behind the onetime reality TV star’s repeat run at the White House. Tesla TSLA.O boss Elon Musk also backed Trump, joining fellow PayPal PYPL.O alum David Sacks, the Craft Ventures founder who fumed on Tuesday at the Republican National Convention about President Joe Biden’s “demented policy.” Sequoia Capital partners Doug Leone and Shaun Maguire are in Trump’s corner, as are Palantir Technologies PLTR.N co-founder Joe Lonsdale and Social Capital CEO Chamath Palihapitiya. Cryptocurrency investors Cameron and Tyler Winklevoss have contributed to the campaign, too.
There may be ideological alignment involved, but naked self-interest and a bias toward contrarian thinking also probably play a part. Choosing Senator JD Vance, who has worked in venture capital, to be on the ticket as vice president inevitably helps. Tech entrepreneurs historically have had libertarian tendencies but also been more in sync with Democrats when it comes to social issues such as same-sex marriage, abortion and gun control. In 2016, 75% of tech entrepreneurs supported Hillary Clinton and just 9% backed Trump, one study found.
Andreessen and Horowitz, whose firm manages some $42 billion, say they are single-issue voters focused exclusively on tech startups. To that end, Andreessen cites a Biden executive order that limits the amount of computing power in artificial intelligence models as a potential precursor to another “reign of terror” like the one he perceives has been waged on blockchain and crypto initiatives. Ending Big Tech monopolies, an idea where Vance and the Biden administration are in agreement, would encourage smaller firms to roll out new products and services in Andreessen’s view. He also railed against the administration’s ill-conceived proposal to impose a 25% tax on unrealized capital gains, which he argues would kill his industry.
By contrast, the recently unveiled Republican Party manifesto under Trump vows to end digital currency crackdowns, repeal Biden’s AI edict and cut taxes. This and more of the platform undoubtedly looks attractive in Silicon Valley. Musk has used the X social media service he owns – sometimes amplifying misinformation – to crusade against the “woke mind virus” and illegal immigration, which hew to Trump’s positions. Leone pointed to growing U.S. budget deficits and foreign policy “missteps” to explain his decision.
This harmonic convergence make sense, but only in a vacuum. Trump is a convicted felon guilty of falsifying business records and sexual assault. From a policy perspective, the Republican nominee champions higher tariffs and mass deportations, which threaten bad economic outcomes, including for the tech industry, which relies heavily on capital and goods from overseas. Abandoning allies by exiting NATO, while ending support for Ukraine and Taiwan – as Trump has indicated he might do – also is bound to create harmful unintended consequences by empowering Russia and China.
Tech entrepreneurs often succeed by defying conventions, and therefore see value and opportunity in those who would dare to do the same. They also fail 90% of the time, with a downside mostly limited to misallocating other people’s capital. The other 10% can more than make up for the losses anyway. When it comes to public policy, the fallout is often wider and more destructive. In Apple’s renowned ad, Jobs concluded that the people who are crazy enough to think they can change the world are the ones who do. Unstated is that the change, especially when it involves the occupant of the Oval Office, isn’t often what it’s cracked up to be.
Follow @jgfarb on X
CONTEXT NEWS
Venture capitalists Marc Andreessen and Ben Horowitz said on a July 16 podcast that they are backing Donald Trump to be U.S. president because they think he helps their agenda of supporting startups.
Graphic: Venture capitalists rethink their political funding https://reut.rs/3Lt6FzP
Editing by Lauren Silva Laughlin and Sharon Lam
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