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What 2024 Valley titans want (and get wrong)

How the next wave of technology is upending the global economy and its power structures
Apr 25, 2024 View in browser
 
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By Derek Robertson

Tesla CEO Elon Musk speaks at a conference in Washington.

Elon Musk. | Susan Walsh/AP

Silicon Valley is one of America’s proudest achievements and most potent sources of power globally — an engine of innovation (and moneymaking) that leaves the country’s allies and rivals seething with envy.

So what if the Valley were really in charge — not just of Americans’ relationship with technology but of setting the terms for modern life itself?

There’s a techno-optimistic argument that Silicon Valley, not the elected government in Washington, is the best, and most important, face of American power. POLITICO editor-at-large Matthew Kaminski wrote yesterday of the unflattering split-screen between the tech world’s confident dynamism, powered by breakthroughs in artificial intelligence and skyrocketing profits, and Washington, where politics feel exhausted and pessimistic: “We have little faith in ourselves. Why would anyone else?”, he grimly asks.

He argues the distrust and lack of confidence many feel in Washington might be hurting America on the global stage — a malady for which the Valley attitude provides an attractive cure. “The rise of West Coast power coincides with the decline of political power,” he writes. “Politics is our view into ourselves. And the view for us and the rest of the world is ugly. If America’s strong from the perspective of San Francisco Bay, Americans certainly don’t think so.”

So if Silicon Valley leaders are the ones projecting a decisive, confident face to the world — and making a new kind of argument for leading the American experiment — then it’s worth taking a closer look at exactly where they might lead it.

One take on the tech industry is that it skews liberal, to the point of being out of touch — an industry stacked with young coastal elites, airy progressive ideals and a devotion to corporate social justice ideology. (Certainly this is how Elon Musk saw Twitter when he bought the company, changed the logo to a black X, and relentlessly trolled its old executives.)

But there’s a reaction that’s gaining in currency and clout. Some of the tech world’s most powerful and politically outspoken figures (including Musk) have recently made a decisive break with the Valley’s corporate liberalism, in favor of right-wing politics or outright conspiracism.

Musk’s dalliance with the right is well-documented, and much of the right-leaning tech cadre is beginning to resemble an official arm of former President Donald Trump’s campaign: David Sacks, Musk’s buddy and host of the mega-popular “All In” podcast, is now reportedly preparing to raise money for Trump’s prospective re-election (following a secretive group of Silicon Valley investors who did the same in 2020). Blake Masters, the Stanford-educated venture capitalist and Peter Thiel protege, is back this year promising “the best America First representation possible” in his bid for Arizona’s 8th Congressional District.

All of these men (Trump included) have one thing in common: success itself is their biggest calling card. They’re billionaires, or at least multi-multi-millionares, with their fortunes built on innovation, disruption and canny investment. The face they present to the world strongly implies their way is the path to not just riches, but a renewed American greatness.

Greatness-through-innovation is a classic Valley trope. The history of tech idealism is shot through with the urge to break through stagnation and create a new, privately-owned “New Frontier.”

Over the years those dreams have crossed the ideological spectrum. But as it becomes more publicly associated with a libertarian, anti-“woke,” innovation-first strain on the right, their rhetoric is increasingly strangely at odds with the actual track record of how innovation has repeatedly changed the world.

The innovations that helped build Silicon Valley’s myth — the internet, the personal computer, the smartphone — were each the result of attempts to fulfill prosaic, research- or consumer-driven demands, not self-conscious attempts to break the status quo. While the invention of the internet was powered by utopian networking visionaries, it was commissioned (by the federal government, no less) to increase the resilience of the nuclear command-and-control system. A handful of entrepreneurial Texan wildcatters, determined to do nothing more than break IBM’s de facto monopoly, were largely to thank for putting a computer in every home. The original smartphone was the Blackberry, born as a glorified pager.

Silicon Valley itself was largely built on the back of massive government investments, in the semiconductor industry, in the internet, in tax incentives for venture capital. Its inventors and their products were largely nourished in the safe confines of universities (like the University of Illinois Urbana-Champaign, where Andreessen developed the groundbreaking Mosaic browser). The wry, resourceful characters who built the Valley and populate its origin stories are a far cry from the dragon-slaying grandiosity of today’s tech vanguard.

You wouldn’t guess any of this from reading the “Techno-Optimist Manifesto” from Andreessen, which holds that the “enemy is institutions that in their youth were vital and energetic and truth-seeking, but are now compromised and corroded and collapsing – blocking progress in increasingly desperate bids for continued relevance, frantically trying to justify their ongoing funding despite spiraling dysfunction and escalating ineptness.”

(Hear that, Washington?)

Put in its full historical context, the heroic libertarian complaints of prime movers like Musk and Andreessen begin to look less like thought leadership and more like the exact kind of rote ideology they claim to sweep aside — a convenient re-reading of history by its winners.

In fairness to their point of view, hardly anyone — even among Andreessen’s most direct ideological opponents — disagrees that America is stuck somehow, that our collective vision for the future has dimmed or disappeared completely, that something needs to change. Even the revolutionary promise of AI might not be a salve: As the New York Times’ Ross Douthat recently noted in a newsletter covering Andreessen’s agitprop, AI “could carry us more organically into a future of personalized illusions, comfortable numbness, simulated relationships and precision-guided digital addictions just as easily as into a future of A.I.-enabled artistic masterpieces, cancer cures, self-driving cars and Mars expeditions.”

The problem with the Valley’s current mania for changing something is that it’s nearly impossible to predict what the outcome of such change will be. The revolution that put an internet-connected supercomputer in nearly every American’s hand was the result of ad hoc tinkering, market-driven compromise and dogged devotion from far-seeing engineers over decades, not the direct result of a political project.

That isn’t to say that Silicon Valley’s would-be world-builders can’t accomplish their goal of change, just that it’s far more often an accident of history. (And at that, the outcome is hard to predict: Valley innovators created the very social problem they now (understandably) decry, in the form of the smartphone and its attendant digital ecosystem that dominates modern American life.)

After all, “Move fast and break things” is an effective mantra if your goal is to dethrone a sclerotic corporate titan, or beat your competitors to an innovative product. But it stands in direct opposition to the actual, messy business of world-building — what political theorist Max Weber called “the slow boring of hard boards,” a project that, mind you, “anyone who seeks to do… must risk his own soul.” Change is not the same as construction.

That should, if nothing else, cool the jealousy voiced by Kaminski’s glum swamp creatures: The tech world’s brash Dr. Frankensteins are just as likely to be surprised, disappointed, or even overcome by the fruits of their labor than to glory in them.

 

THE GOLD STANDARD OF TECHNOLOGY POLICY REPORTING & INTELLIGENCE: POLITICO has more than 500 journalists delivering unrivaled reporting and illuminating the policy and regulatory landscape for those who need to know what’s next. Throughout the election and the legislative and regulatory pushes that will follow, POLITICO Pro is indispensable to those who need to make informed decisions fast. The Pro platform dives deeper into critical and quickly evolving sectors and industries, like technology, equipping policymakers and those who shape legislation and regulation with essential news and intelligence from the world’s best politics and policy journalists.

Our newsroom is deeper, more experienced, and better sourced than any other. Our technology reporting team—including Brendan Bordelon, Josh Sisco and John Hendel—is embedded with the market-moving legislative committees and agencies in Washington and across states, delivering unparalleled coverage of technology policy and its impact across industries. We bring subscribers inside the conversations that determine policy outcomes and the future of industries, providing insight that cannot be found anywhere else. Get the premier news and policy intelligence service, SUBSCRIBE TO POLITICO PRO TODAY.

 
 
chip celebration

A sign marks the entrance of the Micron Technology automotive chip manufacturing plant.

A Micron chip plant in Manassas, Virginia. | Steve Helber/AP

President Joe Biden traveled to Syracuse, New York, today to commemorate the final grant given to build a new chipmaking factory through the CHIPS and Science Act.

POLITICO’s Christine Mui previewed the event this morning for Pro subscribers, where Biden celebrated a $6.1 billion awarded for Micron, the only U.S.-based company that makes high-end memory chips used to store data.

Senate Majority Leader Chuck Schumer (D-N.Y.) has been aggressive in positioning his state as a leader in chip manufacturing, and told reporters “Memory chips are essential to everything from cell phones to cars to defense technology, and particularly to new innovations like AI… We cannot have these chips made overseas, especially by competitors like China.”

The award completes the $28 billion allocated to advanced chipmakers by the CHIPS and Science Act. Intel, Samsung, TSMC and SK Hynix have each received funding through the program. CHIPS Program Office director Mike Schmidt boasted to the POLITICO Tech podcast that “No other economy in the world has more than two [chipmakers] doing leading-edge production.”

healthy competition

Microsoft and Amazon’s moves to invest in leading AI labs are drawing the attention of United Kingdom antitrust regulators.

POLITICO’s Joseph Bambridge reported for Pro subscribers on the tightened scrutiny, as the U.K.’s Competitions and Market Authority said yesterday it’s opening “invitations to comment” from parties that might be worried about antitrust concerns regarding the deals. The deadline for submission is May 9.

The CMA published research earlier this month that described an “interconnected web” of partnerships between just a few major companies that form the current AI industry landscape. Joel Bamford, the CMA’s executive director of mergers, said the body will assess whether the partnerships fall within merger rules and “if they do, whether they have any impact on competition in the U.K.”

The Future in 5 links

Stay in touch with the whole team: Derek Robertson (drobertson@politico.com); Mohar Chatterjee (mchatterjee@politico.com); Steve Heuser (sheuser@politico.com); Nate Robson (nrobson@politico.com); Daniella Cheslow (dcheslow@politico.com); and Christine Mui (cmui@politico.com).

 

POLITICO IS BACK AT THE 2024 MILKEN INSTITUTE GLOBAL CONFERENCE: POLITICO will again be your eyes and ears at the 27th Annual Milken Institute Global Conference in Los Angeles from May 5-8 with exclusive, daily, reporting in our Global Playbook newsletter. Suzanne Lynch will be on the ground covering the biggest moments, behind-the-scenes buzz and on-stage insights from global leaders in health, finance, tech, philanthropy and beyond. Get a front-row seat to where the most interesting minds and top global leaders confront the world’s most pressing and complex challenges — subscribe today.

 
 
 

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