Tesla owner Elon Musk, right, was hardly alone in the tech sector in supporting the reelection efforts by Donald Trump, left. Many Silicon Valley investors and innovators were hoping for a lighter regulatory hand than they have seen under President Joe Biden. (Photo by Brandon Bell/Getty Images)

Some venture capital investors, who have funded the tech boom in Silicon Valley and beyond, say they are excited by the prospect of a lighter regulatory environment under a new Trump Administration than they saw under President Joe Biden.

But they warn that Trump policies that will benefit many technology companies may come at a cost to other pro-Trump voters.

The Bay Area bubble of Silicon Valley, which is home to institutional tech giants like Apple, Google, Intel and Adobe, had been previously seen as a left-leaning region, like many other California communities. But the 2024 election was a unique one, venture capitalists and founders say.

“There’s been a significant shift in the valley rightward since the last election,” said Joe Endoso, a Silicon Valley investor. “And you’ve seen that in the financial flows — in the level of dollars — that were directed towards supporting President Trump’s campaign from the technology sector.”

Endoso, president of financial tech platform Linqto, said some tech industry people who previously voted for progressive issues and candidates this time cast their ballot for Trump. He said he’s heard more concern about potential regulations in the tech industry and negative economic effects under continued Democratic leadership.

This turn toward Trump wasn’t universal in the Valley. The majority of donations from employees at companies like Google, Amazon and Microsoft went toward Democratic candidate Kamala Harris, Reuters reported in September. But tech billionaires like Elon Musk and venture capital investors, like Andreessen Horowitz co-founders Marc Andreessen and Ben Horowitz, poured millions into his campaign.

While Trump didn’t receive unanimous support from the tech sector, many American tech giants and investors are excited about the light-handed approach to tech regulation that’s likely to come in the next four years. Congress has struggled to pass any federal laws around emerging technology like AI, though states have done so on their own on issues like data privacy, transparency, discrimination, and on how AI-generated images can be used.

The Biden administration, however, on its own issued a number of “best practice” guides for emerging technologies and aggressively pursued antitrust cases against some tech giants, including an ongoing case against Google that could force the company to spin off its popular Chrome web browser.

It appears unlikely that Trump will continue the Biden era regulatory and enforcement drives.

Those working in emerging technologies like AI are making advancements so quickly that regulators are unlikely to be able to keep up anyway, Endoso said. The tech industry mindset — move fast and break things, first coined by Facebook founder Mark Zuckerberg — will likely continue under Trump’s administration.

“You’re running through walls and hoping that when the regulations come about, they’re not going to be so, you know, restrictive,” Endoso said. “But you’re not going to sit and wait for the regulators. You can’t afford to.”

Why care about the VC market?

Venture capitalists pour money into many promising startups in Silicon Valley and elsewhere, looking for the ones that will create lucrative new technologies or “disrupt” existing ones. Silicon Valley successes include Uber, which received its first round of venture capital investment for just about $1.3 million in 2010, and Airbnb, which started with just a $20,000 investment in 2008. Today, the companies are worth $146 billion and $84 billion, respectively.

Many more, however, fail. High-visibility startups that folded after raising very large sums include streaming platform Quibi, which raised $1.75 billion and ChaCha, the SMS text-based search platform that had raised $108 million.

The high-risk, high-reward nature of the industry makes for a rarified business, and there’s a high barrier to entry. To become an accredited venture capital investor, one must have an income of at least $200,000 a year, or be worth $1 million. The handful of firms pouring the most money into the United States technology market are usually worth billions.

Yet, the technology being developed and funded by wealthy investors today will shape the next decade of everyone’s lives. Some of the most influential technology in the global economy has been released under President Joe Biden’s administration in the last three and a half years.

Advancements in generative AI and machine learning technology, rapid development of augmented and virtual reality, further adoption of cloud computing and Internet of Things (IoT) technologies, such as internet connected appliances and home devices, along with automation of many industries have already shifted much of American life. ChatGPT, one of the most recognizable examples of generative AI that the public can use, was only released two years ago, but the sector of generative AI is already threatening many American jobs.

Those with writing-focused careers like copywriters and social media marketers, are already feeling the disruption, and experts believe STEM professionals, educators and workforce trainers and others in creative and arts fields are going to see much of their job responsibilities automated by AI by 2030.

The venture capital market has been a volatile one over the last four years. Though many of Trump’s attacks on Democrats during his campaign cycle centered on the healthy economy under his first term, the COVID-19 pandemic was the single-biggest economic factor to disrupt the venture capital market and others.

The U.S. saw its biggest year for venture capital investments in 2021, but supply-chain issues and the continuing reliance on remote work changed the trajectory of many companies’ plans to go public on the stock market. High inflation and interest rates have kept many investors from deploying capital and many companies from completing mergers and acquisitions since then, although the second half of 2024 is looking up.

The economy quickly became the number one issue for Americans in the presidential election cycle. And though thriving venture capital markets usually benefit those that are already wealthy enough to invest, we’ll likely see a positive correlation in the general markets too, said Scott Nissenbaum, president and CEO of Ben Franklin Technology Partners, an innovation-centered fund in Pennsylvania.

“A thriving, efficient market is good for venture capital. And the flip side is also true,” he said. “We feed into and create the innovations and the efficiencies and the next generation … that create the robust and the boom.”

How investors and founders are preparing for Trump

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