Donald Trump's Stunning Victory Over Hillary Clinton Leaves Silicon Valley in Shock

Donald Trump's Stunning Victory Over Hillary Clinton Leaves Silicon Valley in Shock

Donald Trump's stunning upset inspired a wave of despair and anxiety in Silicon Valley. "This feels like the worst thing to happen in my life. I assume we'll get through it, but it sure doesn't feel that way right now," Sam Altman, president of startup incubator Y Combinator, tweeted. "Is this what it felt like when people first realized hitler could actually take power?" tweeted Zynga co-founder Mark Pincus. Shervin Pishevar, the co-founder of Hyperloop One, even suggested that California secede.

Trump's win is the final twist in a surreal race that had drawn the technology hub into an increasingly assertive political role. Trump's most vocal critics weren't talking about their businesses-their worries were more existential-but his presidency leaves the US tech industry in an uncomfortably uncertain position.

By midday Wednesday, prominent figures in tech and trade organizations were looking to strike a more conciliatory note. Still, there's no doubt where their sentiments lay.

Total contributions to the Clinton campaign from the internet industry came in at 114 times the level they did for Trump, according to statistics compiled by the Center for Responsive Politics. Facebook CEO Mark Zuckerberg gave a strongly worded rebuke to Trump's views on immigration at the company's developers conference in April, although he never called him out by name.

(Also see: US Tech Icons Pan Donald Trump as 'Innovation Disaster')

Later, Dustin Moskovitz, who made his fortune as a Facebook co-founder, pledged $20 million to Democratic groups opposing Trump. Other high-profile figures in Silicon Valley such as Salesforce CEO Benioff and Reid Hoffman, chairman of LinkedIn, also took unusually public anti-Trump stances.

The notable exception was Peter Thiel, the billionaire PayPal backer and the valley's resident contrarian.

"Congratulations to President-elect Donald Trump," Thiel said in a statement. "He has an awesomely difficult task, since it is long past time for us to face up to our country's problems. We're going to need all hands on deck." Then on Wednesday morning Benioff tweeted: "Congratulations, President Trump. This is what makes America great---our democracy. Now it's time for us to come together as one country."

As voting took place on Tuesday, people within the industry were feeling relatively confident, and were privately discussing what the early days of a Clinton presidency would look like. Given the harsh turn the discussion on trade had taken on the campaign trail, strategists were preparing to push President Barack Obama to complete the Trans-Pacific Partnership trade agreement before he left office. Clinton had said she planned to advocate for sweeping immigration reform in the early days of her presidency.

If nothing else, Clinton was a known quantity. In June, she published a detailed agenda for her approach to technology policy. The 7,000-word document laid out plans for targeted tax credits, pledged to carry on Obama's policies towards net neutrality, and a national commission on digital security and encryption. It was met with wide approval from an industry that thrived during the Obama years.

(Also see: In Trump Presidency, Elon Musk and Tesla May Lose Big)

Those attempting to divine Trump's stances still don't have such an easy guide. In a broader sense, Trump has positioned himself as a pro-business candidate, and his plan to lower the corporate tax rate to 15 percent would reduce their tax burdens. But he also has a tendency to single out specific enemies, like Amazon CEO Jeff Bezos. In Trump's eyes, Amazon has a huge antitrust problem, and Bezos used the Washington Post, which he owns, to attack Trump's campaign. During the presidential contest, Post reporters were barred from Trump rallies.

When it comes to his approach to issues of specific importance to what Trump has called "the cyber," observers are reduced to learning what they can from a series of offhand remarks. On one of the most contentious issues, encryption, Trump has brushed aside calls for a balanced approach. In February, he attacked Apple for refusing to help the FBI unlock the cellphone of one of the suspects in the San Bernardino shootings. "Who do they think they are? No, we have to open it," he said in an interview on Fox & Friends. Trump has also called for shutting down the web, and once jokingly asked Russia to carry out cyberattacks against the US to find emails related to Clinton's private server.

(Also see: Why Apple Can Take a Bigger Stand Against Trump Than Its Rivals)

The chances for a quick immigration deal are cloudier under Trump than they would have been under Clinton, said Craig Albright, vice president of legal strategy at BSA: The Software Alliance. "It's going to be an issue that gets a lot of noise," he said. "How that noise is translated into action we'll see."

Silicon Valley is in an odd position when it comes to Trump as a cultural phenomenon. He's relied heavily on its products to rally enthusiasm online, using social media to harness and amplify resentment from people who feel economic or cultural anxieties. Over the course of the presidential campaign, Facebook has come under increasing criticism for insulating its users inside online communities purged of opposing views and, at times, factually correct information. Trump's favorite service, Twitter, has been unable to grapple with toxic bigotry and harassment coursing through its system.

At the same time, Silicon Valley is vulnerable to Trump's brand of populism. The tech industry is comprised of a group of coastal elites becoming vastly wealthy at a time when the spoils aren't being shared more broadly, that tends to be largely pro-immigration and socially liberal. Automation imperils blue-collar jobs in ways that are likely only to increase.

"For me the best framework I have is Brexit," wrote venture capitalist Fred Wilson on his blog Wednesday morning. "I feel that the economic and societal unease that has been brewing in much of the developed world over the past decade is coming home to roost and I believe that we will see more 'brexits' in the coming months and years."

Wilson writes that the economic and financial atmosphere is bound to be choppy in the near future. He then offers the standard venture capitalist's response to bad news: a reminder that times of widespread fear always come with new opportunities.

© 2016 Bloomberg L.P.


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