How Trump won, and Biden lost, part of Silicon Valley

On the night of Trump’s election in 2016, I spent the evening talking to Silicon Valley’s politically connected. Everyone was in disbelief and mostly horrified. It was almost impossible to find a Trump supporter in the industry.

Views have shifted dramatically since then. It’s not just Peter Thiel, tech’s biggest contrarian, openly supporting Trump. It’s his fellow PayPal Mafia members like Musk and Sacks. It’s venture capitalists like Andreessen and his partner, Ben Horowitz, and many more.

It may not be mainstream yet, and I haven’t seen a Trump sign near where I live. But the Overton Window has shifted. Openly supporting Trump won’t get you shunned anymore, at least not in Silicon Valley.

But focusing on those big names only tells part of the story. Many of the most politically active people in tech are names you’ve never heard. It’s mid-level VPs who struck it rich on stock options and RSUs, and have become big donors.

Those people were almost unanimously anti-Trump until very recently. Over the last four years, a surprising number have slowly drifted to the other side of the aisle, according to people with access to those circles.

It’s easy to reduce this to taxes. Andreessen and Horowitz said on their podcast Tuesday that Biden’s proposal to tax unrealized capital gains was a major factor. But that is less about their personal taxable wealth and more about the structure of Silicon Valley. It’s difficult to see how venture capital could continue to operate if such a plan were to take effect (which probably makes its implementation unlikely).

In Silicon Valley as a whole, I’m sure the idea that Republican policies generally mean lower taxes factor in, but that’s always been the case. I think the current change is really a mashup of a lot of issues. And the icing on the cake is the Democrats’ reported decision to hide the extent of Biden’s mental decline.

On paper, Biden’s record on tech is pretty good. The CHIPS Act and the Inflation Reduction Act funneled money into the industry from top to bottom. He’s also been aggressive in beating China in a technology cold war, an increasingly popular stance. And his AI executive order reflects a lot of collaboration with the industry.

Despite that, many have come to see the Biden administration as anti-tech.

This may be an unforced error by the Democrats. Biden has been at odds with Musk, who is a hero to many innovators and entrepreneurs, even those who disagree with him politically.

Federal Trade Commission Chair Lina Khan has taken the industry head-on with lawsuits that stretch the limits of traditional interpretations of antitrust. And Gary Gensler, head of the Securities and Exchange Commission, has targeted crypto.

The Democrats and the left are also seen by some in tech to be on the wrong side of the free speech debate, pushing companies to aggressively remove content deemed misinformation or disinformation from online platforms.

The pandemic and the 2020 election cycle showed how the policing of online content could sometimes go too far, often disproportionately silencing right-leaning voices.

Still, it’s anybody’s guess whether a Trump presidency will actually be good for tech.

It will almost surely be chaotic and unpredictable, but tech can still thrive in that situation.

Trump has chastised Meta, Alphabet, and Amazon. Those companies can expect more obstacles, especially considering Vance has expressed support for Khan’s work at the FTC.

Vance has also backed open-source AI models. It’s clear he’s not a fan of Google’s Gemini AI model, which has been criticized for its alleged “woke” responses.

A big question will be whether OpenAI can thread the needle and avoid the ire of Trump. Its relationship with Microsoft could come in handy there. Trump never seemed to have a problem with the company, even allowing it to bid on TikTok. That’s likely because Microsoft doesn’t play the social media game, and therefore doesn’t need to wade into the fraught mess that is content moderation.

Trump could score political points by attacking ChatGPT while OpenAI continues unscathed via its larger and more innocuous investor.

Ultimately, though, I don’t believe Trump’s new-found support in Silicon Valley has as much to do with these kinds of cost-benefit calculations. For some people in tech, it’s more about vibes.

People like Musk and Andreessen view themselves as voices of reason in the debate over “wokeness,” but when they speak out on social media, they face waves of criticism from the online masses and from mainstream media. That has produced its own cultural shift, as resentment over being misunderstood grew.

And going back decades, tech has had a counter-cultural streak. Eschewing rules and social mores often goes hand-in-hand with a certain type of innovation. Today, psychedelic drugs, orgies and polyamory are commonplace. The #MeToo movement is largely out of the headlines, and as Jessica Lessin pointed out recently, the post-#MeToo gains women made in the tech industry are now being rolled back.

The modern Silicon Valley thrived because it welcomed the freaks, rebels and rule breakers, and rewarded them handsomely.

Now, it looks like Trump and the GOP are doing the same thing.

The tech industry’s most vocal and prominent Biden supporter is Reid Hoffman, another member of the PayPal Mafia who went on to co-found LinkedIn. Hoffman argued with Sacks in a recent tweet about Biden’s record compared to Trump’s:

“He worked with both parties to pass critical recovery and infrastructure bills. Crime and unemployment are near 50-year lows. The Dow has hit an all-time high. And a recent IMF report says US economic dominance will keep growing – double any other rich country.

To sum up:

(a) Biden and Obama grew the economy handily;

(b) Trump’s violent, chaotic, one-party approach blew it up and crushed us with debt; and

(c) After four more steady Biden years, America has the world’s strongest economy again.

Looks like David is reading his A/B test results backwards. In tech, we call this ‘being wrong.’”