Democrats Try to Halt Silicon Valley's Swing to the Right

Hindustan Times

2 days ago

Last year's election delivered the biggest blow in decades for the marriage between Democrats and Silicon Valley. Repairing the damage is proving difficult.
Adam Kovacevich, the chief executive of the center-left trade group Chamber of Progress, is trying to play marriage counselor. Kovacevich has spent months talking to Democrats, tech workers and former Biden administration officials about what pushed tech executives away from the party and how to mend the relationship.
Some executives who reliably give to Democrats feel that party leaders view Silicon Valley as a piggy bank and aren't promoting policies that help the industry. The trend is fueling concerns among Democrats that bleeding support among tech elites like OpenAI's Sam Altman and venture capitalist Marc Andreessen is another obstacle for a party facing its lowest poll numbers in more than three decades.
'I think it's a big problem,' said Kovacevich, a former Google executive. 'It would be an own goal for us to become the anti-innovation party.'
About 80% of donations from the communications and electronics sector in the last election cycle went to Democrats, with a similar ratio at big tech companies like Google and Microsoft, according to OpenSecrets, a nonprofit that tracks data on campaign finance. But the alliance soured for some who opposed the Biden administration's focus on regulating areas like cryptocurrencies and artificial intelligence and are encouraged by President Trump's policies.
OpenAI's Sam Altman recently said he's 'politically homeless' after what he said was a Democratic shift away from policies that support innovation and entrepreneurship.
'The Democrats were the party of innovation and all things new and cutting edge. We definitely took a back seat,' said Brian Brokaw, a Democratic adviser to California Gov. Gavin Newsom and others.
Brokaw, who also has tech clients, warned that his party needs to persuade the industry that it is pro-innovation or risk losing a financial lifeline. 'If you don't have the support financially from what was, in recent cycles, a key component of your fundraising base, that is going to put the Democrats at an electoral disadvantage,' he said.
Rank-and-file tech workers are mostly expected to continue backing Democrats, but the shift among some key executives is another development worrying party leaders.
Altman recently said he was 'politically homeless' after what he said was a Democratic shift away from policies that support innovation and entrepreneurship. Altman once compared Trump to Hitler, but he is now among Trump's favorite executives, embracing the president's policies of cutting red tape and supporting AI.
Kovacevich's listening tour is one of several steps Democrats are taking to address the challenge. Earlier this year, House Minority Leader Hakeem Jeffries (D., N.Y.) and Silicon Valley Rep. Sam Liccardo met with donors about repairing the relationship.
Liccardo, a former mayor of San Jose, Calif., said Democrats can win back support from smaller tech companies that don't like Trump's tariffs, attacks on immigrants and funding cuts at universities. Liccardo recently helped publish an innovation agenda for a group of House Democrats that gave priority to research funding and high-skilled immigration.
'This is an opportunity for the Democrats to distinguish ourselves if we're willing to embrace the imperative of supporting innovation,' he said.
Cooper Teboe, a Silicon Valley-based Democratic adviser, estimates Democrats hemorrhaged support from 30% to 40% of the tech industry during the 2024 election but has earned some back. One challenge is that many tech entrepreneurs are benefiting from Trump's policies of tax cuts and deregulation.
'These guys just want to build things and make money and so does Trump,' said Teboe.
He said Democrats can still win back the support they lost—especially if they focus on tariffs and economic uncertainty—but most of the party needs to change its strategy. He is working with Liccardo and Rep. Ro Khanna (D., Calif.), who also represents a big chunk of Silicon Valley and has good relationships with the industry. Both Khanna and Liccardo are some of the House's top fundraisers.
Many tech executives or their companies donated $1 million to Trump's inaugural fund. Several of the top inauguration donors flanked Trump when he was sworn into office for a second time, including Tesla Chief Executive Elon Musk, Apple CEO Tim Cook and Amazon.com founder Jeff Bezos.
'Some of the same people who were standing up there at Trump's inauguration were talking to people like me in 2017-2018,' said Aaron Goldzimer, a Democratic donor adviser.
The mood at an AI summit attended by Trump in late July was jubilant. Executives including Nvidia's Jensen Huang mingled with administration officials and Trump laid out his plan to beat China in the tech race. Trump criticized former President Joe Biden's focus on export restrictions and standards for AI models as overly cautious. 'The greatest threat of all is to forfeit the race and force our partners into rival technology,' he said.
Nvidia CEO Jensen Huang spoke with Trump administration officials last month at an AI summit.
Trump has also embraced cryptocurrencies, putting Democrats in Congress in a bind. Opposing legislation creating the industry's first regulations could be seen as fighting an innovative technology, but supporting it could benefit Trump through his family's ventures. His family has already made at least several hundred million dollars from various crypto ventures. The White House has said there is no conflict of interest.
'I've never seen people more willing to support Republicans and even Trump than right now in Silicon Valley,' said Matt Lira, a Republican who worked on tech issues in the first Trump administration.
A crypto funded super-PAC network recently said it held more than $140 million at the end of June, a signal that it plans to target opponents of the industry in next year's midterms like it did in 2024. In the past, it has supported both Democrats and Republicans.
Musk highlighted another risk for Democrats of losing ultrarich tech executives when he donated nearly $300 million to Trump and other Republicans ahead of the 2024 election. The relationship between Trump and Musk has since fractured, and Musk has said he is starting a third party.
Some tech executives such as Konstantin Richter, CEO of California-based crypto company Blockdaemon, are waiting to see what Musk does because of their unhappiness with both parties. 'They've dug themselves a hole that's very hard to get out of,' Richter said of Democrats.
Write to Amrith Ramkumar at [e-mail] and Eliza Collins at [e-mail]
Democrats Try to Halt Silicon Valley's Swing to the Right