[Global Focus] "Tired of Biden's Regulations" Silicon Valley Turns Red

Rightward Shift in Silicon Valley, a Democratic Stronghold
Recent Support Declarations for Trump and Vance Draw Attention
Tech Industry Sentiment Shifts Away from Biden's Anti-Market Policies
Antitrust, Wealth Tax, AI Regulation, Cryptocurrency Crackdown
Uncertain Whether Trump and Vance Will Be Favorable to Silbal

Silicon Valley, known as the stronghold of the US Democratic Party and the "holy land" of big tech (large information technology companies), is shifting to the right. Unprecedented support and praise from Silicon Valley business figures have been pouring in for former President Donald Trump, who was recently shot, and Senator JD Vance, his designated running mate. Locally, analysts suggest that as the Biden administration's regulatory crackdown on big tech sharpens, Silicon Valley's heavyweights are turning their backs. However, some argue that the Republican Trump-Vance ticket could actually have a negative impact on Silicon Valley.

The Fallen Blue Wall... Trump Support Continues

Trump's political action committee (super PAC), America PAC, which launched last month, had raised $8.7 million as of the 16th of this month, with Silicon Valley figures contributing $1 million of that amount. Donors include Joe Lonsdale of AI-based software company Palantir and Sean Maguire of Sequoia. Tesla CEO Elon Musk is also reported to plan monthly donations of about $45 million to a new super PAC supporting Trump's presidential bid.

Since Trump was shot during a campaign event on the 13th, declarations of support from big tech leaders centered in Silicon Valley have continued. On the day of the incident, Musk tweeted on X (formerly Twitter), "I fully support former President Trump and wish him a speedy recovery," while Amazon founder Jeff Bezos said, "Our former president showed incredible grace and courage literally amid a shootout tonight."

Microsoft CEO Satya Nadella, OpenAI CEO Sam Altman, and Salesforce CEO Marc Benioff also posted messages wishing for Trump's quick recovery. Political media outlet The Hill described these statements from Silicon Valley CEOs as "effectively close to expressing support for former President Trump."

Why the Change in Silicon Valley Public Opinion?

Located in California, Silicon Valley has traditionally been a stronghold of Democratic support. Political donations from Silicon Valley have also heavily favored the Democratic Party. However, under the Biden administration, the spread of anti-market and anti-regulation sentiments is causing a shift in the tech industry's public opinion.

Federal Trade Commission (FTC) Chair Lina Khan has taken a tough stance on big tech antitrust investigations, continuing related lawsuits. Locally, there is also resentment over the "wealth tax" proposal unveiled in March, which would raise the corporate minimum tax rate from the current 15% to 21% and impose a minimum income tax rate of 25% on the top 0.01% of earners.

The California State Assembly Democrats also introduced a bill mandating AI safety measures, which has contributed to Silicon Valley's public opinion turning due to concerns over increased regulatory costs. Additionally, Silicon Valley is home to many cryptocurrency entrepreneurs, and SEC Chair Gary Gensler's hostile stance toward cryptocurrencies is also seen as a factor in the support for former President Trump.

Will Vance’s Vice Presidential Nomination Sustain Support?

[Image source=Yonhap News]

Last week, at the Republican National Convention, Senator JD Vance, who has strong ties to Silicon Valley, was nominated as the vice presidential candidate, further strengthening Republican support in Silicon Valley.

Vance, born in the declining industrial Rust Belt, established connections in Silicon Valley during his time at Yale Law School in 2011. According to The New York Times (NYT), Peter Thiel, PayPal founder and Vance’s mentor, emphasized Silicon Valley’s advantages in past lectures, and Vance began his first job at Silicon Valley biotech company Circuit Therapeutics in 2013 after graduation.

He later worked at Mithril Capital in 2016 and Revolution in 2017, and after moving back to his hometown Ohio in 2019, he founded Narya Capital, which redistributed funds from the East Coast to underdeveloped regions.

With this background, Vance received support from Silicon Valley networks when he ran for the federal Senate in 2022. This is seen as leading to Silicon Valley lobbying for Trump to select Vance as his running mate ahead of the November presidential election, based on expectations that they would pursue deregulation in Silicon Valley.

Will Trump and Vance Be Friendly to Silicon Valley?

However, The Economist pointed out that even if Trump and Vance enter the White House next year, it is uncertain whether they will implement policies favorable to Silicon Valley.

First, Trump’s universal tariff policy could trigger trade wars, increasing uncertainty for the industry. His declared immigrant deportation policies could worsen labor shortages. Vance supports antitrust laws targeting big tech and expressed admiration for Chair Khan earlier this year. In February, he tweeted, "Google holds a monopoly over the control of information in our society," supporting the breakup of Google Alphabet. This raises concerns that mergers and acquisitions (M&A) could face a cold spell during a second Trump term.

Trump’s hostile stance toward existing social networking service (SNS) platforms also adds tension in Silicon Valley. Twitter and Facebook notably suspended Trump’s accounts after the January 2021 Capitol riot by Trump supporters. Although these platforms restored his accounts this year, Trump currently posts only on his own platform, Truth Social. Moreover, Trump opposed the "TikTok Ban Act," enacted in April due to security concerns, and even created a TikTok account to use for his presidential campaign.

Some analysts suggest that following last month’s televised debate, where health concerns about rival President Biden were highlighted, and the rallying effect of the shooting incident boosting Trump’s chances, Silicon Valley is proactively sending love calls to the Trump camp.