Silicon Valley’s hottest club: Mar-a-Lago

Summary

POLITICO Tech Podcast Summary
Episode: Silicon Valley’s Hottest Club: Mar-a-Lago
Release Date: December 18, 2024
Host: Stephen Overlea
Guest: Gabby Miller, Author of POLITICO's Morning Tech Newsletter

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Introduction

In this episode of POLITICO Tech, host Stephen Overlea delves into the burgeoning relationship between Silicon Valley's top executives and President Elect Donald Trump. The discussion highlights a strategic shift as major tech leaders flock to Mar-a-Lago, signaling a significant pivot in the tech industry's approach to political engagement and regulatory influence.

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Silicon Valley Executives Flocking to Mar-a-Lago

Stephen Overlea opens the conversation by noting the recent influx of Silicon Valley heavyweights visiting Mar-a-Lago. Executives such as Mark Zuckerberg (Meta), Tim Cook (Apple), Sundar Pichai (Google), Jeff Bezos (Amazon), and Ted Sarandos (Netflix) have been engaging in private dinners and closed-door discussions with President Elect Donald Trump. This movement represents a notable departure from Silicon Valley's historical reluctance to engage deeply with Washington's political sphere.

Stephen Overlea [00:27]: "In just the past week, they've all paid President Elect Donald Trump a visit at his South Florida for private dinners and closed door conversations."

Gabby Miller elaborates on this trend, emphasizing that these visits are part of a broader "charm offensive" aimed at securing Trump's favor, which could grant these companies significant influence over future policies related to AI, tariffs, and antitrust regulations.

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Historical Context and Industry Shift

Gabby Miller provides context on why this shift is occurring. Traditionally, Silicon Valley has maintained a distance from Washington, viewing politics as a "dirty" arena they preferred to avoid. However, as tech companies find themselves increasingly entangled in regulated industries—such as Amazon with FAA-regulated drone deliveries and Apple collecting FDA-regulated healthcare data—they recognize the need to engage directly with policymakers.

Gabby Miller [03:55]: "So now that they're finding themselves in the regulatory crosshairs of different industries that are more traditionally regulated... they have to play the game."

This necessity has led to the establishment of lobbying efforts and, under Trump's administration, direct involvement in decision-making processes.

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Tech CEOs' Strategic Engagement with Trump

The episode explores how tech CEOs, who largely remained neutral or subtly supportive during the recent election cycle, are now actively seeking Trump's endorsement. This includes public financial support, such as cutting $1 million checks to Trump's inauguration fund.

Gabby Miller [05:03]: "This is kind of them making amends and saying it's going to be different this time around because they have, frankly, more to gain by being friendly with him this time around."

This approach mirrors strategies seen in previous administrations, where major companies made significant contributions to inauguration funds, signaling their political leanings and seeking influence.

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Impact on Regulatory Policies

A significant portion of the discussion centers on how these relationships might influence regulatory policies:

1. TikTok Ban and Meta's Position:

   • Mark Zuckerberg and Meta are keenly interested in the potential banning of TikTok, a competitor. With TikTok's future in Trump's hands, Meta stands to gain by supporting the ban, which could reduce competition and solidify Meta's market position.

   Gabby Miller [06:36]: "Zuckerberg has a lot to gain by saying, hey, man, like, we want you to ban TikTok."

2. Apple and Tim Cook's Influence:

   • Tim Cook has a history of effectively lobbying Trump, notably securing exemptions from tariffs on Chinese imports during Trump's first term. His current engagement suggests a strategic effort to mitigate potential tariff increases that could hinder technological innovation.

   Gabby Miller [09:57]: "That is, we are seeing this AI boom. We need chips to be able to power these AI, large language models and other uses for it."

3. SoftBank's AI Investment:

   • Masa Yoshi Son of SoftBank announced a $100 billion investment in AI infrastructure in the U.S. at Mar-a-Lago, positioning the investment as both a business move and a political win for Trump, promising job creation and economic growth.

   Gabby Miller [12:07]: "The press release actually emphasized, you know, this investment will, under Trump, create 100,000 new jobs for America."

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Potential Risks and Internal Dynamics

While the tech industry's engagement with Trump aims to secure favorable policies, Gabby Miller highlights potential risks:

• Antitrust Scrutiny:

  • Executives who supported Trump may still face antitrust actions from figures like Lina Khan and Jonathan Kantor, suggesting that political alignment does not fully shield them from regulatory challenges.

  Gabby Miller [14:03]: "It doesn't guarantee per se, that the future administration isn't going to go after them or the relationship isn't going to sour."

• Internal PR Strategies:

  • To mitigate backlash from within their companies, where many employees hold Democratic views, CEOs are using collective actions to avoid singling out individuals. This "safety in numbers" approach helps manage internal dissent.

  Gabby Miller [16:24]: "That's why, you know, this, the steady drumbeat of CEOs coming out back to back is kind of also an internal PR strategy to prevent this kind of uprising."

• Influence of Elon Musk:

  • Elon Musk emerges as a powerful voice within Silicon Valley, potentially shaping political discourse and balancing the influence of other tech leaders.

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Conclusion

The episode underscores a pivotal moment for Silicon Valley as its leading figures actively seek and cultivate relationships with the incoming Trump administration. This strategic engagement aims to navigate and influence the evolving landscape of technology regulation, tariffs, and antitrust laws. However, it also introduces complexities related to internal company dynamics and the stability of these relationships amidst ongoing regulatory scrutiny.

Gabby Miller [15:29]: "So there's a chance he can lean on Brendan Carr and say, hey, can you, can you not do this? Or can you do that?"

As tech companies invest in political capital, the long-term implications for policy-making and industry regulation remain to be seen, positioning Silicon Valley at the heart of America's technological and political future.

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Notable Quotes:

• Stephen Overlea [00:27]: "In just the past week, they've all paid President Elect Donald Trump a visit at his South Florida for private dinners and closed door conversations."

• Gabby Miller [03:55]: "So now that they're finding themselves in the regulatory crosshairs of different industries that are more traditionally regulated... they have to play the game."

• Gabby Miller [06:36]: "Zuckerberg has a lot to gain by saying, hey, man, like, we want you to ban TikTok."

• Gabby Miller [12:07]: "This investment will, under Trump, create 100,000 new jobs for America."

• Gabby Miller [15:29]: "So there's a chance he can lean on Brendan Carr and say, hey, can you, can you not do this? Or can you do that?"

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Tags: #POLITICOtecht #SiliconValley #MarALago #DonaldTrump #TechRegulation #AI #Tariffs #BigTech #Lobbying #Innovation

Transcript

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[Stephen Overlea]

Hey, welcome to Politico tech. Today's Wednesday, December 18th. I'm Stephen Overlea. Lately, the guest book at Mar A Lago reads like a Silicon Valley roll call. Mark Zuckerberg from Meta, Tim Cook from Apple, Sundar Pichai from Google, Ted Sarandos from Netflix. In just the past week, they've all paid President Elect Donald Trump a visit at his South Florida for private dinners and closed door conversations. A number of companies including OpenAI, Meta, Amazon and Perplexity, are currying favor with Trump publicly too, cutting $1 million checks for his inauguration fund. And the incoming president is feeling the tech love. In the first term, everybody was fighting me.

[Gabby Miller]

In this term, everybody wants to be my friend. I don't know, my personality changed or something.

[Stephen Overlea]

Of course, winning Trump's favor is the whole point of these grand gestures, because Trump will soon wield a lot of power over their companies, from AI policy to tariffs to antitrust. And things got pretty rocky the last time that happened. Gabby Miller is the author of POLITICO's Morning Tech newsletter and the newest member of POLITICO's tech reporting team. She makes her podcast debut on the show today. To break down Big Tech's charm offensive, here's our conversation.

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[Gabby Miller]

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[Stephen Overlea]

Gabby, welcome to Politico Tech.

[Gabby Miller]

Thank you so much for having me.

[Stephen Overlea]

Oughta be a fly on the wall at Mar A Lago these days. I mean, it seems like every big shot in Silicon Valley is making a pilgrimage to South Florida.

[Gabby Miller]

So last week we saw in the span of just two days we saw Meta's Zuckerberg, we saw OpenAI's Sam Altman, we saw Amazon's Jeff Bezos. And then afterwards, Perplexity threw their hat in the ring. And just in two days, we saw this kind of carousel of different tech executives going to mar a lago. And then either while they were there or on the way out, they were cutting giant million dollar checks.

[Stephen Overlea]

Right?

[Gabby Miller]

So they are hobnobbing with Trump. And this is something that Silicon Valley is historically not known for doing. So this is an industry that is, you know, one of my sources, New Wexler, he actually has worked at Facebook, Google and Twitter before they were, you know, rebranded as Meta and X was bought by Elon Musk, and now he's a consultant in dc. New Wexler talked about how historically, you know, Silicon Valley has wanted to stay out of Washington. They saw the whole thing as dirty. They don't want to get involved, didn't want to dirty their hands. And, you know, they didn't even want to build out lobby shops in K Street.

[Stephen Overlea]

Right.

[Gabby Miller]

And so now that they're finding themselves in the regulatory crosshairs of different industries that are more traditionally regulated. So we've seen, you know, Amazon trying to scale up their delivery operations, and in doing so, they have, you know, implemented drones. And drones are ready regulated by the Federal Aviation Administration. And so they've had to comply with that. We've seen Apple, they have their watches, are collecting healthcare data, and so that data is regulated by the fda or they have to comply with different regulatory rules. So now that they've found themselves in the regulatory crosshairs, they have to play the game. And in playing the game, that means that they have to not only build out their lobbying shops, but now under this Trump era, they have to actually be in the room when these decisions are being made.

[Stephen Overlea]

Right. Well, a number of these CEOs, you know, kind of sat on the sidelines in this past election cycle. I think they may privately have been supportive of Trump or some supportive of Harris, but certainly they weren't standing on stage with him or funding his campaign a la Elon Musk. How are they now trying to make up for that?

[Gabby Miller]

Right. So I think it's important to note that one, this is not abnormal in terms of big CEOs making grand gestures. You know, last inauguration for Joe Biden in 2021, we saw that Microsoft was writing checks for Biden, Melinda Gates, Bill Gates was writing checks. So this is not something new in that way. And, you know, one of my Sources New Wexler was talking about how there are quieter ways to donate money to an inauguration campaign. And so these are regulated by the Federal Elections Commission. You know, they have to report their donations, and that'll come out after the inauguration. And it's kind of playing into this, you know, Trumpian aspect of grand gesture. He likes someone who can kiss the ring, so to speak. And, you know, this is something that he doesn't want to be quiet because the previous time around in 2016, it was kind of this fight with the media and fight with big tech. And although the fight with big tech has continued, which is an interesting dynamic that goes into this as well, you know, this is kind of them making amends and saying it's going to be different this time around because they have, frankly, more to gain by being friendly with him this time around.

[Stephen Overlea]

And so, I mean, this parade of tech leaders, like, let's kind of go through a couple of the big ones. You mentioned Meta CEO Mark Zuckerberg. Right. He's been. He was sort of one of the first tech CEOs to meet with Trump. What does Meta have to gain or lose from this relationship?

[Gabby Miller]

Right, right. So right now, there is a TikTok ban that's very up in the air. And, you know, we know that Meta owns Facebook and Instagram and is a competitor with TikTok. You know, it's even introduced some of the, you know, similar features that make TikTok so popular, like the endless video scroll, which they've, you know, the reels. And so getting TikTok banned, which is very much up in the air. Trump has a few different options on what, you know, right now, TikTok is. The TikTok ban is. They're fighting it out in court, and they plan to take that fight to the Supreme Court. But in the meantime, you know, when Trump goes into office, he has an option whether he can enforce the ban or not. He can tell Apple's CEO Tim Cook, which hosts the Apple App Store, hosts TikTok. He's able to say, you know What? I like TikTok, and this is good for my base. You know, this helped me get elected with the youth vote, which he's gone out and said over the past week or so.

[Stephen Overlea]

Right. I think he said he has a warm spot in his heart for TikTok. That's how he phrased it.

[Gabby Miller]

Yeah. And people are trying to read the tea leaves, but we just don't know what he's going to do with the TikTok ban. But he has the option to weigh in and say, hey, Tim Cook, you know, I'm not going to enforce it. Keep posting TikTok. So Meta, you know, Zuckerberg has a lot to gain by saying, hey, man, like, we want you to ban TikTok. He has a lot to gain there.

[Stephen Overlea]

Speaking of TikTok, one of the other visitors to Mar A Lago is TikTok CEO Xiao Chu, who met with Trump and Mar A Lago just this week. As you said, sort of the fate of TikTok is to some degree in Trump's hands now.

[Gabby Miller]

Yeah. What's interesting about that, another person I spoke to for this story, Katie Harbath, formerly of Meta for many years and now is a global affairs officer for a consulting firm called Duco. Experts made this point and she's saying, a lot of people are talking about this in Washington. What we know from Trump's first term is being the last person in the room matters. So we have one CEO in his ear saying, hey, don't ban TikTok, and then the next one saying, Please ban TikTok. So he has competing voices in his head saying both those things. And at the end of the day, I mean, we know Trump doesn't. At least there's an impression that Trump doesn't let people push him around and tell him what to do. But being the last tech CEO in the room to tell him those things before he makes that decision, and he continues to talk about it over the last week, you know, it's important. It's not just about lobbying money and money they're spending on the Hill and trying to fight a bill, which they're doing quite well at because the tech industry is still one of the most unregulated industries in existence in the U.S. but, you know, it's wanting to actually have decision making power.

[Stephen Overlea]

Right. Well, and to me, there's no better example of that than Tim Cook at Apple. I covered tech's influence in the first Trump administration, and Tim Cook was really very effective at winning Trump over, particularly when it came to tariffs. Apple was able to get a lot of its products exempt from tariffs on Chinese imports. And Tim Cook, who Trump famously once accidentally called Tim Apple, was very successful at making that happen. And he seems to be back at it again because he's one of the folks who was meeting with Trump at Mar A Lago.

[Gabby Miller]

Right. And I think tariffs are scaring everyone right now, frankly, in the tech industry. He's been on the campaign trail against the wishes of his own advisors saying, or different conservative economists saying the Amount of tariffs that he wants to levy on Chinese imports would be terrible for the economy writ large, let alone tech. That is, we are seeing this AI boom. We need chips to be able to power these AI, large language models and other uses for it. So to levy giant tariffs on Chinese imported chips is going to definitely hold back on the innovation that they have beat the drum on for the past year or so. The biggest messaging that the tech industry puts out is innovation, innovation, innovation. So tariffs are going to absolutely, you know, impinge that innovation.

[Stephen Overlea]

Right. I mean, for as much as the tech industry likes to talk about competing with China and the need to beat China, certainly they rely on a lot of imports from China. And, yeah, I think the tariffs and I would say tax reform are two big issues that the tech industry is going to be lobbying on quite heavily and very concerned about. You know, it's funny to me, one of the other business leaders visiting Trump this week was Masa Yoshi Son, the CEO of Japanese tech investor SoftBank, who went to Mar? A Lago and announced plans to invest $100 billion in AI infrastructure in the US which, this announcement is right out of the playbook from the first Trump administration, because back then, company after company sort of announced plans for these major investments, many of which, by the way, were years in the making. But nevertheless, they were very savvy about packaging them as sort of this win for Trump and win for the companies and kind of creating this nice PR moment, even though, frankly, some of those companies never followed through ultimately on those investments. And so I have a feeling that now that folks have gone to kiss the ring, the next thing we'll probably see is companies announcing big investments and other kind of moments where Trump can stand up and claim victory.

[Gabby Miller]

Yeah. What's interesting about the SoftBank announcement is that when I received the press release for that from the transition team, I actually had to double check that that wasn't a collaboration that Trump was promising future government funding for, because the way it was being packaged was. It was this collaboration. And then once I looked a little closer, I was like, this really doesn't have anything to do with Trump other than him taking the podium with him and standing up and saying, this is amazing. And the press release actually emphasized, you know, this investment will, under Trump, create 100,000 new jobs for America. So. And we know that that's the winning message for Trump that he campaigned on, both in this campaign cycle and in the last. So he's going to be using a lot of these moments to say, hey, look, I want to impose these tariffs on Chinese goods. We don't need them. We are going to be making these goods at home. We're going to be making chips at home, we're going to be making software at home. So he's really doing double duty with announcements like that, right?

[Stephen Overlea]

No, absolutely. And the companies, of course, are using these to get in his good graces and curry his favor. But, you know, I recall in the very early days of Trump's first administration, all of these photo ops with Trump sort of sitting around a table with a bunch of tech CEOs talking about innovation and making these grand promises, and it all fell apart very quickly because literally, you know, a couple weeks, I think, into his first term, Trump announced that he was banning travelers from several Muslim majority countries. And tech sector sort of responded very negatively to that. And all of that sort of pomp and circumstance very quickly eroded. And so I wonder what you see as the potential risks for tech CEOs this time around, kind of currying favor with Trump.

[Gabby Miller]

One of my sources, Adam Kovacevic, he was formerly of Google for 12 years. Now he's the founding CEO of Chamber of Progress. He was saying, you know, there are a lot of executives, specifically tech executives, who donated to Biden's inauguration fund. And Lina Khan and Jonathan Kantor went after them with antitrust, throwing the antitrust book at them. So it doesn't guarantee per se, that the future administration isn't going to go after them or the relationship isn't going to sour. But I think there's, you know, there's the dynamic of Elon Musk is now the loudest voice in the room. Elon Musk has changed the current political landscape in D.C. in terms of speaking on behalf of Silicon Valley. So they know that even though it can't ensure Trump going after them in various ways, whether it's, you know, through the fcc, the, you know, incoming chair, Brendan Carr, he has gone on and on about wanting to crack down on the censorship cartel. And that is different social media platform like Facebook itself, right? So those people are. We can expect them to go after big tech because that has been their message for the past several years. But at the same time, the reason Trump wants certain people around him is because they are loyal to him.

[Stephen Overlea]

Right?

[Gabby Miller]

So there's a chance he can lean on Brendan Carr and say, hey, can you, can you not do this? Or can you do that? Can you go, can you go after big tech? Can you soften on big tech? So it really just depends on how things are gonna shake out. So, you know, there's been a splinter in Silicon Valley. Many of the employees are more Democratic. They are not the biggest fan of Trump. And they don't like that the people leading their companies, there's been backlash. They don't like that the people leading their companies are going to Trump and shaking his hands. And so in order to stave off backlash even from within the own companies, as Adam Kovacevic said, there's this safety in numbers kind of strategy. So that's why, you know, this, the steady drumbeat of CEOs coming out back to back is kind of also an internal PR strategy to prevent this kind of uprising. Almost is the vibe that I'm getting.

[Stephen Overlea]

Right. No one can get singled out if they're all doing it and doing it at the same time.

[Gabby Miller]

Yeah.

[Stephen Overlea]

Well, Gabby, appreciate you being here on Politico Tech.

[Gabby Miller]

Thank you so much for having me.

[Stephen Overlea]

That's all for today's Politico Tech. If you enjoy Politico Tech, be sure to subscribe. And for more tech news, subscribe to our newsletters, Digital Future Daily and Morning Tech. Our managing producer is Annie Reese. Our producer is Afraid Abdullah. I'm Stephen Overlay. See you back here tomorrow.