Why some Silicon Valley investors are backing Trump-Vance campaign

Former President Trump talks with his running mate, Sen. J.D. Vance.

July 18, 2024 11:31 AM PT

SAN FRANCISCO — For many years, Republicans and ardent supporters of former President Trump haven’t been super popular in Silicon Valley circles.

But the sentiment has shifted in recent weeks as conservative voices in San Francisco’s tech sector have grown increasingly strident in their support of a Trump-Vance ticket.

Trump attended a fundraiser last month at venture capitalist David Sacks’ Pacific Heights mansion that raised $12 million and was the former president’s first visit to San Francisco in at least a decade. Sacks said he hoped the event would “break the ice” on discussions around Trump and could create a “preference cascade, where all of a sudden it becomes acceptable to acknowledge the truth.”

And on Tuesday, Sacks posted a list of 17 prominent names in the tech industry — including Tesla Chief Executive Elon Musk, Sequoia Capital partner Doug Leone and Ben Horowitz, general partner of renowned venture capital firm Andreessen Horowitz — with a photo of Trump giving a thumbs-up on social media platform X, formerly Twitter. “Come on in, the water’s warm,” Sacks wrote.

Many of those tech investors celebrated the appointment of Ohio Sen. J.D. Vance — a venture capitalist who built his career in Silicon Valley — as Trump’s vice presidential nominee out of a shared belief that he would help remove regulations they believe could stifle innovation in artificial intelligence and cryptocurrency.

“The future of our business, the future of new technology and the future of America is literally at stake,” Horowitz said Tuesday on “The Ben & Marc Show” podcast. “For little tech, we think Donald Trump is actually the right choice, and sorry, Mom, I know you’re gonna be mad at me for this, but we had to do it.”

But Gov. Gavin Newsom said the shift of Silicon Valley toward the right in this presidential election has been “wildly overstated.”

“I don’t think it’s a trend at all. Those pockets have always been there,” Newsom said in an interview Tuesday while touring a Northern California prison. “There’s been that libertarian energy in the valley for decades and decades. And frankly, I don’t see significant deviation.”

Newsom, who built close ties with the tech industry while mayor of San Francisco from 2004 to 2011, said Silicon Valley donors supporting Trump are “looking at their own economic interests and are very transactional in their business practices.”

Nonethless, while Silicon Valley has long been home to prominent conservatives such as Peter Thiel and Sacks, such enthusiastic embrace for a Trump-Vance administration in San Francisco’s tech community is striking.

The Bay Area is well known nationally for its progressive politics and as the birthplace of prominent Democrats such as the late Sen. Dianne Feinstein, former House Speaker Nancy Pelosi, Newsom and Vice President Kamala Harris. And Bay Area social media companies like Meta (formerly Facebook) have come under fire from some Republican legislators who accuse them of censoring conservative ideas and Trump.

The region is overwhelmingly represented by Democrats in the statehouse and the San Francisco, San Jose, Berkeley and Oakland mayors’ offices. And while big names in Silicon Valley have more recently donated large sums to the Republican Party and Trump’s election campaign, the Bay Area is more typically the favored cash cow of Democrats.

In 2020, 72.6% of Santa Clara County voters backed Joe Biden, and just 25.2% supported Trump.

Biden made a fundraising stop at billionaire environmentalist and former hedge fund manager Tom Steyer’s house in September. Reid Hoffman, co-founder of LinkedIn, is another Democratic mega-donor who has hosted fundraisers for Biden, as has venture capitalist and Tesla investor Steve Westly.

In May, investor Vinod Khosla, who hosted a Biden Bay Area fundraiser that month, said he’s a huge supporter of the president.

“We have to absolutely at any cost make sure that donkey’s rump Trump doesn’t get elected and destroy democracy,” Khosla said at a Bloomberg event.

But others in the Silicon Valley have soured on Biden for a variety of reasons, including the government suing tech giants like Apple and Google over alleged monopolistic practices.

Some tech investors also believe the continuation of the Biden administration would restrict innovation in emerging technologies, hindering the nation’s ability to compete in the global tech race — and their own financial interests.

They point to what they call unnecessary investigations by the U.S. Securities and Exchange Commission into crypto startups and the challenges crypto businesses face in getting financing from banks.

“This is a brutal assault to a nascent industry that has never happened before,” Marc Andreessen said on “The Ben & Marc Show” podcast, acknowledging that his firm is one of the largest cryptocurrency investors in the world.

By contrast, the Trump campaign’s platform calls for the end of the “unAmerican Crypto crackdown” and pledges to “defend the right to mine Bitcoin, and ensure every American has the right to self-custody of their Digital Assets, and transact free from Government Surveillance and Control.”

If elected, Trump also said he would repeal Biden’s executive order on artificial intelligence “that hinders AI Innovation, and imposes Radical Leftwing ideas on the development of this technology. In its place, Republicans support AI Development rooted in Free Speech and Human Flourishing,” according to the Republican platform.

Another beef among tech investors: Biden’s capital gains tax proposal, which would tax the value of an individuals’ assets worth $100 million or more. Critics say that would affect startup founders, whose company valuations fluctuate and whose compensation is based on stock options.

“This makes startups completely implausible,” Andreessen said. “Venture capital just ends.”

A representative for the Biden administration did not immediately return a request for comment.

Trump’s appointment of Vance — who previously worked with Thiel at Mithril Capital — is expected to give his campaign a further boost among tech backers.

Thiel served on Trump’s transition team after he won the presidency in 2016 and backed Vance when he ran for office, pouring $10 million into Vance’s coffers during his 2022 race for Senate in Ohio, federal records show.

Sacks contributed $1 million to a PAC backing Vance and co-hosted a fundraiser in Miami for Vance and eight other Republican Senate candidates. Vance, who lived briefly in San Francisco, has called Sacks “one of his closest confidants” in politics.

“He’s perceived as one of them,” said Olaf Groth, chief executive of the think tank Cambrian Futures and a professional member of the faculty at UC Berkeley’s Haas School of Business. “The people that are endorsing him are a very rare elite at the very top of the food chain of entrepreneurship and venture capital of Silicon Valley.”

Silicon Valley leaders are beginning to build the war chest of a new political action committee, America PAC, that is backing Trump’s reelection bid. America PAC reported spending $7.7 million on canvassing, text messages and get-out-the-vote operations over the last three months.

The group’s website and social media accounts are focused on voter registration and turnout, featuring a 15-second clip of Trump saying that “absentee voting, early voting and election-day voting are all good options.”

Multiple outlets reported this week that Musk has pledged to give $45 million per month to the group through November. Other Silicon Valley donors to the group include cryptocurrency executives Cameron and Tyler Winklevoss; Joe Lonsdale, co-founder of Palantir Technologies; and Shaun Maguire, a partner at Sequoia Capital, federal filings show.

Republican Party backers say more Bay Area businesses are getting frustrated at how local government is handling crime and other issues in San Francisco.

“These companies are being crippled by Democrat policies,” said Harmeet Dhillon, California’s Republican national committeewoman and a San Francisco-based attorney who acts as an official legal surrogate for the Trump campaign. “They have to make decisions that are the best for them, so that’s the calculus I’ve been seeing.”

Some Trump supporters, such as Andreessen, had previously supported other Democratic presidential candidates such as Hillary Clinton. Within Biden’s own Democratic Party there are schisms over whether he should be the next president, given concerns about his age.

“They’re voting with their pocketbooks, but by signaling that they’re not in lockstep with Democrat policies and Democrat disarray of our country, they’re signaling to their tens and hundreds of thousands of workers that it’s OK to be Republican,” Dhillon said.

Times researcher Scott Wilson contributed to this report.

Why some Silicon Valley investors are backing the Trump-Vance campaign

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