Speaker 1: Bloomberg Audio Studios, podcasts, radio news. When Donald Trump announced JD.
Speaker 1: Vance as his running made on Monday, some of the
Speaker 1: most prominent people in Silicon Valley rejoiced. Chamath Polyopatia, the
Speaker 1: CEO of Social Capital and a former Facebook exec, posted
Speaker 1: on X a bestie adjacent as the VP from delhian Asparov,
Speaker 1: a well known venture capitalist quote, we have a former
Speaker 1: tech VC in the White House. Greatest country on Earth. Baby.
Speaker 1: There's been some reporting that Elon Musk himself lobbied Trump
Speaker 1: to choose Vance as his VP. Just a few hours later,
Speaker 1: news broke of Musk's commitment to donating forty five million
Speaker 1: dollars a month to a Trump superpack led by Silicon
Speaker 1: Valley alums. The next day, Musk tweeted as a reminder
Speaker 1: Doug leone of Sequoia Capital, publicly voiced his support for
Speaker 1: Trump six weeks ago. Silicon Valley has shifted. It's an
Speaker 1: eye popping series of developments for anyone who remembers when
Speaker 1: Elon Musk made his Iron Man cameo and was seen
Speaker 1: as the manifestation of Obama era hopes that Silicon Valley
Speaker 1: innovation could make climate goals a reality.
Speaker 2: Good idea for electric jet. You do, then we'll make
Speaker 2: it work.
Speaker 1: Today, Musk and many of his former PayPal co founders
Speaker 1: and other longtime tech leaders have lined up behind Trump.
Speaker 1: One of them, David Sachs, was even a keynote speaker
Speaker 1: at the Republican National Convention this week. My friends, we
Speaker 1: need President Donald J. Trump back in the White House.
Speaker 1: So how did we get here? What does this sudden
Speaker 1: infusion of Silicon Valley capital to the Trump campaign mean
Speaker 1: for the twenty twenty four election. What might the storied
Speaker 1: crew of savvy investors expect in return if Trump gets
Speaker 1: a second term? This is the big take from Bloomberg News.
Speaker 1: I'm David Gura.
Speaker 2: Stereotype of Silicon Valley is liberal. Is just It's wrong.
Speaker 1: Max Chafkin covers Silicon Valley and its intersections with politics
Speaker 1: for Bloomberg BusinessWeek. He also wrote the book on a
Speaker 1: legendary Silicon Valley figure, the contrarian Peter Thiel, and Silicon
Speaker 1: Valley's pursuit of power.
Speaker 2: This is an industry that was founded as defense contractors.
Speaker 2: Like when you think about like where Silicon Valley comes from,
Speaker 2: it comes from tech companies doing business with the military.
Speaker 2: That's the root of the industry. I think what has
Speaker 2: changed is that Silicon Valley historically was pretty libertarian, you know,
Speaker 2: low taxes, limited government intervention, immigration, because the industry has
Speaker 2: been and will probably continue to be dependent on immigrant
Speaker 2: labor to some extent, and many founders come from different countries.
Speaker 2: These are all kind of like basic libertarian values that
Speaker 2: both parties a Democrat and Republican have competed for over
Speaker 2: the years.
Speaker 1: Yeah, Max, I remember in two thousand and eight, two
Speaker 1: thousand and nine, there was I think a warm relationship
Speaker 1: between Silicon Valley and a Democratic president Barack Obama. He
Speaker 1: even jokingly said he might think of moving to Silicon
Speaker 1: Valley and becoming a VC as a logical next career
Speaker 1: step for him when he left the White House. Just
Speaker 1: remind us what those days were like and sort of
Speaker 1: what the political terrain looked like in Silicon Valley.
Speaker 2: Then, So, venture capitalists their thing is is like, is
Speaker 2: not a data business, even though they've invest in a
Speaker 2: lot of like data driven companies. It's a vibes business.
Speaker 2: It's like getting a feeling and making a gut decision.
Speaker 2: And they saw a vibe shift in two thousand and
Speaker 2: eight they saw the way that Barack Obama was able
Speaker 2: to marshal these giant crowds and generate a lot of
Speaker 2: youthful enthusiasm. And also Obama was pretty enthusiastic about Silicon Valley.
Speaker 2: He saw, you know, the new economy and tech as
Speaker 2: a way to help the nation's grow and he was
Speaker 2: very vocal about that. Obama was very supportive of Elon Musk,
Speaker 2: gave this big loan to Tesla that helped save it
Speaker 2: in the wake of the economic crisis. Very big on
Speaker 2: electric cars, very big on alternative energy, and Elon Musk,
Speaker 2: being essentially the savvy operator that he is, embraced that
Speaker 2: part of his identity and his company's identity. He really
Speaker 2: framed Tesla during those years as an environmentalist project.
Speaker 1: During the twenty sixteen election, many of these tech leaders
Speaker 1: did not endorse Trump. In fact, about one hundred and
Speaker 1: forty industry executives published an open letter denouncing him. One
Speaker 1: notable exception was Peter Teel.
Speaker 2: Co founder of PayPal, co founder Palenteer, and more importantly,
Speaker 2: a really big deal venture capitalist. His main firm is
Speaker 2: called Founder's Fund. He's also invested in many other venture
Speaker 2: capital firms and really what's most important about Peter Teel
Speaker 2: is that he has this network of kind of like
Speaker 2: minded technologists, many of whom are very wealthy, many of
Speaker 2: whom are very powerful. It's called the PayPal Mafia.
Speaker 1: It's a name that's kind of shrouded in some mystery
Speaker 1: here Max PayPal Mafia, What is it and who's in it?
Speaker 2: It refers to the early employees and founders of PayPal
Speaker 2: who got together in the late nineties, took PayPal public,
Speaker 2: sold it to eBay, got very rich, and then use
Speaker 2: that money essentially to make other investments. And so it's
Speaker 2: a group that includes Elon Musk, who was effectively a
Speaker 2: copounder of PayPal, Max Levchin, who runs a company called
Speaker 2: a Firm, David Sachs, who was at the Republican Convention,
Speaker 2: has become a major donor, reied Hoffman, founder of Lincoln
Speaker 2: who's a big Democratic donor, founders of YouTube, Yelp. You know,
Speaker 2: it goes on and on. Many of them have stayed
Speaker 2: in touch. They invest in each other's companies, They help
Speaker 2: one another. It's not just a business network, it's a
Speaker 2: political network. In addition to helping one other's companies, advancing
Speaker 2: a vision of politics as well well.
Speaker 1: During the twenty sixteen campaign, Peter Tele made waves by
Speaker 1: endorsing Donald Trump.
Speaker 2: First of all, it was shocking because very few business people,
Speaker 2: not just Silicon Valley people, were enthusiastic about Trump, but
Speaker 2: also because like Trump's whole thing seemed one hundred and
Speaker 2: eighty degrees from the stereotype of Silicon Valley, even the
Speaker 2: stereotype of like Silicon Valley conservatism. Like we're talking about
Speaker 2: a proud lud eite, a guy who doesn't use email.
Speaker 2: We're talking about a guy who wants to have like
Speaker 2: extreme crackdown on immigration. And Peter Tele, like many very
Speaker 2: successful people in Silicon Valley, is an immigrant. It just
Speaker 2: like goes on and on. Right, He seemed like the
Speaker 2: very opposite of everything that like somebody like Peter Tele
Speaker 2: stood for, and even like Teal had talked about that,
Speaker 2: he'd said, like, Donald Trump, I'm paraphrasing, is like a
Speaker 2: symptom of everything that's wrong with New York City. On
Speaker 2: the other hand, when you sort of look a little deeper,
Speaker 2: Donald Trump, despite being kind of an odd fit in
Speaker 2: terms of his character sort of an awkward match with
Speaker 2: many of these technologists, they actually fit in sort of
Speaker 2: well together. And the reason for that, I'd say, is
Speaker 2: so Teal, over the course of his career, his whole
Speaker 2: thing had been this idea that we as a society
Speaker 2: had stagnated. It was this idea that big business and
Speaker 2: government have sort of slowed down and startups, these Silicon
Speaker 2: Valley companies are the thing that's going to bring us
Speaker 2: back to that crazy sci fi future that we once imagine.
Speaker 2: That was the future of Peter Teel's boyhood. Right. But
Speaker 2: it's also just kind of another formulation for mega. It's
Speaker 2: a backward looking idea, it's an idea of nostalgia. It is,
Speaker 2: in a weird way, kind of like a Silicon Valley
Speaker 2: version of what Donald Trump was saying. Donald Trump was saying,
Speaker 2: we need to get back to the future. We need
Speaker 2: to make America grade again.
Speaker 1: You could hear that sentiment during Teal's speech at the
Speaker 1: twenty sixteen Republican National Convention.
Speaker 2: Donald Trump asked us to make America great again.
Speaker 1: He's not suggesting a return to the past.
Speaker 2: He's running to lead us back to that right future.
Speaker 1: October twenty sixteen, a critical moment for the Trump campaign.
Speaker 1: The Access Hollywood tape just released at.
Speaker 2: The time, like every Republican was sort of running away
Speaker 2: from him, and like that's when Peter Teal chose to
Speaker 2: donate to Donald Trump. He gave a million dollars to
Speaker 2: a Donald Trump political action committee, and he gave this
Speaker 2: speech where he kind of explained himself and the explanation
Speaker 2: was like, I don't agree with what Donald Trump said,
Speaker 2: I'm offended by them, but he's the guy. And Teal
Speaker 2: had this very memorable line, you know, you shouldn't take
Speaker 2: Trump literally, you should take him seriously, implication being like
Speaker 2: he may be a little different from what you and
Speaker 2: I want, but he's the guy we need. And like
Speaker 2: that became the kind of like default Teal position, and
Speaker 2: I'd say like a position that was sort of adopted
Speaker 2: by many in the corporate world after Trump got elect
Speaker 2: did and they had to work with him.
Speaker 1: Trump is elected and there's this meeting that takes place
Speaker 1: at Trump Tower in Manhattan. All these tech executives come.
Speaker 1: Just set the scene for us. What did they talk
Speaker 1: about at that meeting? And what does it say to
Speaker 1: you about the relationship that Donald Trump had with big tech?
Speaker 2: So Teal after the election was named a prominent position
Speaker 2: on the transition Committee. December fourteenth, twenty sixteen. There's this
Speaker 2: meeting on the twenty fifth floor of Trump Tower. Just
Speaker 2: to set the stage, glass all around this big boardroom table,
Speaker 2: and you have basically a who's who of Silicon Valley
Speaker 2: seated with Trump in the middle. You got Trump, Mike
Speaker 2: Pences on his right side, Peter Tele's on his left side,
Speaker 2: and then going around it's all the biggies jol.
Speaker 1: Musco CEO of SpaceX, Tesla, Eric Smith, Alphabet Google, and
Speaker 1: Saffricatz I'm CEO.
Speaker 2: Of Borco, Tim Cook on the other side of the table,
Speaker 2: Larry Page, Jeff Bezos, Eric Trump, Don Junior. So it's
Speaker 2: like Silicon Valley has made it to the inner sanctum.
Speaker 2: Once the cameras are gone, they just snapped into business mode.
Speaker 2: You know, they were lobbying. You know, they were got
Speaker 2: right down to business. And that's essentially the story of
Speaker 2: the first Trump presidency. Trump didn't follow through with many
Speaker 2: of these incredibly aggressive proposals. You know, there was a
Speaker 2: trade war with China, but Apple won a lot of exemptions.
Speaker 2: Trump talked ad nauseam about how terrible Facebook was and
Speaker 2: how social media need to crack down social media. There
Speaker 2: were all these events at the White House with various
Speaker 2: like far right bloggers and so on, but nothing actually happened.
Speaker 2: The stocks of these companies did very well. Trump essentially
Speaker 2: left these guys alone.
Speaker 1: So by the end of Trump's first term, he had
Speaker 1: a pretty favorable relationship with big tech. But then came
Speaker 1: January sixth. Trump was kicked off Twitter and Facebook and
Speaker 1: everything changed. That's coming up. January sixth initially seemed like
Speaker 1: it would make Trump toxic even to the business minded
Speaker 1: execs in Silicon Valley, But as Bloomberg BusinessWeek reporter Max
Speaker 1: Chafkins says, Silicon Valley is more often about vibes, and
Speaker 1: soon the vibes were back in Trump's favor.
Speaker 2: And so what happened is, I think first the Republican
Speaker 2: Party sort of figured out that Donald Trump was still
Speaker 2: very popular and that voters were going to be willing
Speaker 2: to look past January sixth. Teel also kind of he
Speaker 2: never totally distanced himself from Trump, but he sort of
Speaker 2: went quiet after the twenty twenty election, and he started
Speaker 2: getting active again during the mid term. And these MAGA
Speaker 2: Republicans did not necessarily have a great general election. Some
Speaker 2: of them lost, but it was clear that the Republican
Speaker 2: Party was Donald Trump's party, and I think from the
Speaker 2: mid term to today, the sort of comfort with Trump
Speaker 2: has grown.
Speaker 1: If you look at the list of people who are
Speaker 1: supporting Donald Trump this time around from Silicon Valley, is
Speaker 1: there a common thread of grievances that they have with
Speaker 1: this curt administration with President Biden.
Speaker 2: There's sort of two buckets of grievance with the Biden
Speaker 2: administration that you hear from Silicon Valley. One bucket is policy.
Speaker 2: Many of these guys are investors on this list. Many
Speaker 2: of these guys made enormous investments in various crypto companies,
Speaker 2: and Biden administration cracked down on crypto to some extent.
Speaker 2: There have been a bunch of criminal prosecutions of some
Speaker 2: really prominent crypto figures and also lots and lots of
Speaker 2: civil actions. As many people in crypto see it, the
Speaker 2: Biden administration has essentially gone to war against crypto. A
Speaker 2: second bucket anti trust. Because of this kind of slightly
Speaker 2: more aggressive pose of the FTC, the M and A
Speaker 2: market has really cooled off because these big tech companies
Speaker 2: don't feel like they can do, you know, big acquisitions
Speaker 2: as easily because there's always a risk of anti trust
Speaker 2: and so like that has really disrupted the business of
Speaker 2: many of these venture capitalists. And so the industry thinks
Speaker 2: that Biden has been too hard on them, and that's
Speaker 2: a policy thing, but there's sort of a related thing,
Speaker 2: which is like character and manner and like how Biden
Speaker 2: talks about the industry. He has not been as solicitous
Speaker 2: of these guys. There's a sense that they do not
Speaker 2: have a president who is accommodating them.
Speaker 1: Trump certainly represents a more accommodating president, but they also
Speaker 1: seem to think they'd have an accommodating vice president, somebody
Speaker 1: who could pick up the Republican Party mantle in a
Speaker 1: post Trump world. I want to ask you about jd. Vance,
Speaker 1: the junior senator from Ohio, now Donald Trump's running mate.
Speaker 1: What familiarity does he have with with a lot of
Speaker 1: these people.
Speaker 2: He met tiol Ata a law school event while he
Speaker 2: was at Yale, and then he writes this book Hillbilly Elogy,
Speaker 2: which is, you know, a super successful memoir that really
Speaker 2: struck a nerve, especially it was published in twenty sixteen,
Speaker 2: kind of became a sort of way to understand like
Speaker 2: what was happening. With the rise of Trump, Teal blurbed
Speaker 2: the book and Teal hired JD. Vance at Mythrol, which
Speaker 2: is like kind of one of his other venture capital firms.
Speaker 2: His time at Mithroll was very short. This is not
Speaker 2: somebody who had like a long distinguished career in tech
Speaker 2: before he went into politics. And then the political story
Speaker 2: really intensifies in twenty twenty one after Trump, you know,
Speaker 2: lost reelection after January sixth, Teal takes jade Vance Tomorrow
Speaker 2: Lago to essentially introduce him and also help kind of
Speaker 2: repair some of the damage because jade Vance, when he
Speaker 2: was promoting Hillbilly elogy, was super down on Donald Trump.
Speaker 2: He presented himself not as a a enthusiastic supporter of
Speaker 2: trump Ism, but kind of as an explainer of trump
Speaker 2: Ism and a critic of trump Ism. And then most importantly,
Speaker 2: Teal gives him a huge chunk of change to get
Speaker 2: his primary candidacy off the ground. I think without the
Speaker 2: fifteen million dollars that Teal puts into JD. Fance's campaign,
Speaker 2: you know, we don't have JD. Vans the Senator. We
Speaker 2: don't have JD. Vance the vice presidential candidate.
Speaker 1: Teal's donation to JD. Vance, Elon Musk's eye popping pledge
Speaker 1: of forty five million dollars a month to a Trump
Speaker 1: super pack, and now the Republican ticket with Trump and
Speaker 1: Vance at the top. It all raises a question, Max,
Speaker 1: there's something kind of inherently transactional. I think not to
Speaker 1: be too cynical about political donations, but you know, if
Speaker 1: you're ponying up forty five million dollars a month, one
Speaker 1: would think that you'd want something in return. What do
Speaker 1: these leaders in Silicon Valley expect to get or want
Speaker 1: to get from Donald Trump if he's reelected.
Speaker 2: They want to be left alone. For the most part,
Speaker 2: Palenteer during the Trump years did exceedingly well, got lots
Speaker 2: and lots of contracts. The government denied that there was
Speaker 2: any reason other than merit for Palenteer to get those contracts,
Speaker 2: but there were a handful of companies that were less
Speaker 2: well politically regarded that did not get contracts. And Elon
Speaker 2: Musk is, in addition to an electric car executive, a
Speaker 2: defense contractor. There are a lot of economists right now
Speaker 2: in twenty twenty four writing about how terrible Trump's various
Speaker 2: proposals would be we saw, you know, earlier this week
Speaker 2: the stock market dived because Trump made some comments Bloomberg BusinessWeek,
Speaker 2: and it has implications for chip companies or whatever. But
Speaker 2: I think what a lot of these CEOs know, and
Speaker 2: the Trump supporters know, or at least think they know,
Speaker 2: is that Trump didn't follow through with many of these
Speaker 2: incredibly aggressive proposals. Trump essentially left these guys alone. When
Speaker 2: you look at who is supporting Trump this time, they
Speaker 2: see a president who was fairly hands off on tech,
Speaker 2: and that's kind of like what they're hoping for. Again,
Speaker 2: they don't take the rhetoric literally, you know, just as
Speaker 2: Teal suggested.
Speaker 1: This is the big take from Bloomberg News. I'm David Gerre.
Speaker 1: This episode was produced by Julia Press and Andreana Tapia.
Speaker 1: It was fact checked by Thomas lou. It was mixed
Speaker 1: by Bill Moss. Our senior producers are Kim Gittleson and
Speaker 1: Naomi Shaven, who also edited this episode with Stacy vanick Smith.
Speaker 1: Our senior editor is Elizabeth Ponso. Nick cool Beemster Borr
Speaker 1: is our executive producer. Sage Bauman is Bloomberg's head of Podcasts.
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