What Silicon Valley thinks it will get from a second Trump term
Welcome to a special edition of Cautious Optimism. Today, we’re dispensing with our usual format to focus on a single topic. — Alex
A dam burst in the last few days as a wave of venture capitalists and founders declared their political allegiance to former President Donald Trump. Reporting indicates that Elon Musk intends to spend several hundred million dollars backing Trump, while the a16z founders are gearing up for their own massive donations.
Not everyone in tech is a Trump supporter. There are well-known venture and startup names who are vocal in the other direction. (Here’s an example from this week.) But as the Biden campaign twists in the wind, Trump is picking up both electoral and financial support from folks with a lot of influence and wealth — in a hurry.
So, why?
One nice thing about hosting a podcast with Jason is that we have different friend groups and thus hear different things. Taking advantage of that, I asked Jason what tech folks who do support the former President in the current election hope to get out of the deal. They are spending their personal capital on his reelection, so they must expect some sort of return. Jason obliged the question.
You can listen to the entire conversation here (timestamp 20:14). What follows are what I consider the critical excerpts, with my questions greatly condensed and Jason’s answers edited lightly for clarity:
Alex: You have tech and venture friends who are fans of former President Trump. So, I’m curious: When you’re hanging out and chatting, what are the policies that they hope to see from a second Trump administration?
Jason: Yeah, I'll just speak frankly [about] it and tell you what is said in the room where it happens, so to speak. I won't speak for anybody else, but I'll tell you the vibes.
The essential vibe is [that] Silicon Valley is a libertarian place more than anything. If they worship at an altar, it's the altar of innovation and entrepreneurship, capitalism, products and services, making the world better for humanity. And that science, technology and entrepreneurship can all make the world better and that politicians generally make it worse — [that’s] generally how people feel. […]
Most [Silicon Valley folks] would like a moderate who stays out of the way of business, who's pro-growth, lower taxes, lower spending. […]
I think the Silicon Valley diaspora, and all the entrepreneurial enclaves in the country now, because it's really split up and gone everywhere, their basic feeling is Biden is anti-capitalistic. He's pro-union. He's high-taxes. He's more regulation, more spending, and anti-M&A.
And [they] look at the current situation as a John Galt-Atlas Shrugged situation. People in Silicon Valley believe what we're seeing under Biden is Atlas Shrugged. That's what they believe. And just to refresh anybody, it means capitalists and creators of jobs are diminished and held back and the state is getting bigger and bigger and controlling and mitigating more of your life. That’s actually how they feel.
They see Trump as a sledgehammer […] a cudgel, a weapon to break the system.
Now, previously, Trump was untenable because of his style [and position on] abortion, Roe v. Wade, a bunch of issues — immigration [etc]. But Trump 2.0 has pandered to them, adopted their philosophies. Essentially Trump has embraced this group of people — technology entrepreneurs, hedge fund managers in a major way to win the second election. So that's why they're all in on Trump.
I concur with Jason that this is the leading vibe.
In short, some tech folks are buying into Trumpism because they feel poorly treated by the government and would like it to be more in tune with their own desires and goals. Warner Bros. Discovery’s CEO recently encapsulated this sentiment, saying that he didn’t care who won the upcoming election so long as businesses got “an opportunity for deregulation, so companies can consolidate and do what we need to to be even better.”
But what about Trump’s policies that are very anti-libertarian? The former President has called for 10% tariffs generally, and 60% tariffs on Chinese-made goods. Libertarians consider tariffs anathema, so how do we square Trump’s stated plans with what his recently minted backers want from him and the libertarian bent of Silicon Valley?
We return to Jason:
Jason: What [tech folks backing him] also realize about Trump is he says bombastic things to pander to get votes. And that's part of his genius as a politician, is he is incredibly good at telling you what you want to hear.
A famous moment on the All In podcast when Trump was on was when I asked him, ‘Hey, would you promise us that we could recruit talented people?’ And he's like, ‘I promise you.’ Like, boom. And he gave the caveat, ‘because I happen to agree, but I promise you, we’re going [to do it].’
And then the [Winklevoss twins] gave him a million dollars each […] and he just realized, ‘hey, crypto gets me, what, 3 million votes, 2 million votes? There's some number of Americans who feel passionate about this, young people, millennials.’ ‘Oh, TikTok is very popular amongst young people, maybe I’ll switch my position’ […]
The tariff stuff? They look at that and they're just like, ‘that's just him saying he's going to blow up Russia if they invade Ukraine and he'll end that war.’ He's just being bombastic. That's the way he negotiates — is with a crazy starting position and then he works his way backwards.
So I think that's how Peter Thiel trained people to take Trump statements not literally but seriously.
The next question is simple: Are the people betting on Trump going to get what they want out of him? I’m not so sure.
Trump, populism, and Vance
The current GOP platform doesn’t mention M&A or the FTC. It’s short, vague, and something that the party can wave at without getting dirty on specifics. Specifics, that I suspect, would be unpopular with even some of Trump’s supporters.
What we do have is Project 2025, a Heritage Foundation document replete with the hands and pens of former Trump administration officials.
Why does that matter? Recall that Trump’s judicial picks were largely Federalist Society members, and he said his judges would be “all picked by the Federalist Society.” When Trump can outsource work, he does. That’s why Project 2025 in its minute detail likely provides a better look at what a second Trump administration would try to enact, should he win a second term, than his party platform.
And what does Project 2025 have to say about corporate M&A, Big Tech, and free speech online? Nothing super libertarian as far as I can tell. The Project’s FTC notes (starting on page 869) meander between traditional antitrust views (Sherman, Taft), and some well-known economists (Friedman). It also says this:
More broadly, there is less and less debate around the growth of monopoly rents throughout the U.S. economy. The current data strongly suggest that U.S. corporations are systematically earning far higher profits than they were 25 or 30 years ago. Combined with other evidence that large corporations are accounting for an increasing share of revenue and employment, it certainly appears that many large U.S. corporations are earning substantial incumbency rents, and have been doing so for at least 15 years, apart from during the depths of the Great Recession that began in 2008.
That’s notable.
Enter Vance. Senator Vance, previously a San Francisco-based bruncher and community gardener, is a man of the new right. The right that is slightly less cozy with business interests. And now he’s the running mate.
Reason, the libertarian magazine, is worried about Vance because he’s a fan of what current FTC head Lina Khan is doing. Khan, the current archenemy of tech investors.
After broadsiding what Khan has accomplished during her tenure, Reason quoted a Vance quip from February:
“I guess I look at Lina Khan as one of the few people in the Biden administration that I think is doing a pretty good job.”
The dearth of M&A today in startup-land is multifactorial, but one input is certainly the fact that the U.S. government has regrown teeth when it comes to blocking mergers it considers anti-competitive. Tech folks are irked. But here’s Vance, praising the very thing that they hate.
Mix in the tariffs that Trump wants to put into place—sticking to a mere two issues for now—and you have a candidate on the top of the ticket who wants to boost trade protectionism and a candidate on the bottom of the ticket who recently praised the Kahn FTC. You might begin to wonder if the venture crew may be backing the wrong horses
I put that question to Jason. He was adamant in his view that the next FTC head will be far more lenient on things like corporate combinations. Why? Because “that’s where the donations come from,” he said. Fair enough.
Still, we cannot discount the Trump wildcard factor. If you will allow me one more quote from the conversation and some self-indulgence at the same time:
Alex: The thing I'm going to say is a lot of people have thought that they were going to get what they wanted out of Trump historically, and they don't tend to —
Jason: Example?
Alex: Well, we just discussed the evangelicals who have been backing him tooth and nail. And if you read coverage of the current GOP platform, there's a lot of angst — real anger from people who he turned on once he got their vote in the thing he needed.
And so my point is the very trend that you're saying is savvy [that Trump can get the right votes when he needs them] also applies to the Silicon Valley libertarian right. Because once he gets their money, once he gets their votes, do you think he cares? I don't think so.
Jason: I think he cares about business and money. And fame, above all else.
Alex: Yes, but I think he cares about his business, his money, and his fame.
Reality Check
Under the current Biden administration, major technology companies have never been worth more, venture capital has troughed-out from its 2021 hangover, inflation is falling, unemployment is low, and the United States is outgrowing its rival developed nations.
All told it’s a pretty great economic climate for business, even if persistent cries of economic pain from lower down in our nation’s class strata do make me wonder if we’re in a k-shaped recovery more than a v-shaped recovery that everyone can participate in equally.
Regardless, I hope the above helped you understand the current Trump 2024 vibe from tech that you cannot escape over on Twitter.
If you found this post useful, drop me your email. Cautious Optimism is a newsletter on tech, business, and power. It’s also modestly upbeat. — Alex