Why Silicon Valley’s rift with the White House is growing deeper

Barack Obama’s White House hosted so many Google executives that it was seen as a satellite office. The company’s chairman Eric Schmidt campaigned vocally for Obama’s election, and during Obama’s eight years in power, a Google employee visited the White House on average once a week.

Democrat ties to Silicon Valley did not stop at a single company. Sheryl Sandberg, Facebook’s number two, worked for the Clinton administration. Obama’s political strategist David Plouffe went on to work for Uber and Mark Zuckerberg’s charitable foundation. The former president’s press secretary, Jay Carney, is now a senior executive at Amazon.

Elon Musk’s Tesla survived in its early days partly through hundreds of millions of dollars of Obama-era loans.

But in recent months, the once-strong ties between US Democrats and Silicon Valley, the new heart of American corporate power, have broken down. In the last week, the tech industry’s two wealthiest individuals have attacked Joe Biden’s party, while a growing number of senior figures have questioned the administration.

“In the past I voted Democrat, because they were (mostly) the kindness party,” Musk tweeted on Wednesday. “But they have become the party of division & hate, so I can no longer support them and will vote Republican.”

Earlier this month, Amazon founder Jeff Bezos launched a rare political intervention, attacking Biden over his record on inflation. In response to Biden calling for higher taxes on corporations to fight price rises, Bezos accused the US president of “misdirection”.

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“Inflation is a regressive tax that most hurts the least affluent,” he added.

For years, Silicon Valley and its workers appeared to be natural allies of the US Left. The web’s pioneers boasted of libertarian ideals and the end of censorship, an antidote to conservative fears over violent video games and rap music that paralleled its rise. Its workers were primarily young, university-educated and socially liberal.

Santa Clara County, the home of Apple, Google and Facebook, voted for Republicans Richard Nixon, Gerald Ford and Ronald Reagan, but has swung blue in every presidential race since 1988.

It became a mutually beneficial relationship. For Democrats, Silicon Valley was the acceptable face of capitalism, mission-driven, vibrant and diverse, not to mention a huge source of funds. Silicon Valley donations to Obama in 2012 outpaced those to Mitt Romney roughly tenfold. In turn, the Clinton and Obama administrations brought light-touch regulation, such as the Section 230 protections that broadly granted legal immunity to social networks. In 2012, the Obama administration decided not to bring monopoly abuse charges against Google, and waved through acquisitions such as Facebook’s takeover of Instagram.

Tech’s Right-wing only occasionally stuck their head above the parapet. Former eBay boss Meg Whitman unsuccessfully ran for California governor as a Republican in 2010. When Peter Thiel, a PayPal founder and early Facebook investor, spoke in support of Donald Trump at 2016’s Republican National Convention, he became a pariah to much of the tech industry.

The Biden White House has been more hostile to tech companies and their owners, however. Biden has accused companies such as Facebook of “killing people” for not regulating Covid posts more strictly. He has also appointed a string of senior officials who have called for Big Tech to be broken up, such as Tim Wu and Lina Khan, two stars of the antitrust movement.

Biden has also strongly supported unions, putting him in conflict with the likes of Amazon and Tesla. The Tesla billionaire has also grumbled at Biden’s apparent reluctance to credit his company with driving the electric vehicle revolution, while heaping praise on Ford and General Motors.

In contrast, Trump cut taxes on the huge stashes of overseas funds that Apple, Google and Microsoft held, which were returned to grateful shareholders.

But it is Democrats’ tax policies that have caused the biggest stir among Silicon Valley’s wealthiest. Last year, US senators Ron Wyden and Elizabeth Warren proposed taxing the richest 700 Americans on their unrealised gains, such as the soaring value of their shares. The plan was scuppered by moderate Democrats but earned Musk’s ire.

“Eventually, they run out of other people’s money and then they come for you,” he wrote in October. Later, he sold 10 per cent of his Tesla shares, resulting in a tax bill of about $US11 billion. “I’m paying the largest amount of tax of any individual in history,” he said.

Zach Graves, executive director of the Lincoln Network, a technology policy group, says: “There has always been a libertarian kind of flair in Silicon Valley, but sometimes that’s been more underground. They don’t wear it on their sleeve. The convention that Silicon Valley leans pretty strongly to the Left is right. But you do see notable exceptions.

“People have become more successful, maybe they have had their exit [a major payday such as an IPO]. They feel more comfortable in their political views.”

A string of top Silicon Valley investors such as Paul Graham, the Welsh born founder of Y Combinator, and Marc Andreessen, the head of one of Silicon Valley’s top venture firms A16Z, have become more outspoken about Left-wing censorship.

“It used to be that censorship was something the Right did, and free speech was something the Left were in favour of. But over the last few decades, banning ‘problematic’ ideas has become a huge component of Left culture,” Graham wrote last month.

Musk has promised to use his $US44 billion takeover of Twitter to reverse this trend, saying he would promote free speech and allow Trump to return to the service. The White House responded by highlighting Biden’s concerns about “misinformation” on social media.

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If tech’s elite are divorcing from the Left, it could put them in further conflict with the Silicon Valley rank and file, who have protested over work such as military contracts and who disproportionately donate to Democrat candidates.

But as the tech industry moves out of California, its politics may change too. Miami’s Republican mayor has cosied up to the city’s cryptocurrency scene, and Texas governor Greg Abbott has embraced tech firms moving to his state. As a wave of anti-tech sentiment runs through US Democrats, Biden risks losing one of his most powerful constituents.

Telegraph, London