Silicon Valley got Trump completely wrong

Last year, a coterie of tech billionaires rallied behind Donald Trump’s candidacy. Many had not been lifelong Republicans. In 2016, the venture capitalist Marc Andreessen declared Hillary Clinton the “obvious choice” for president, saying Trump’s immigration agenda “makes me sick to my stomach.” Elon Musk, meanwhile, had once been an Obama-supporting climate hawk. Yet they, and many others in their circles, found their way to supporting an openly authoritarian insurrectionist in 2024. They offered many explanations for this decision, some of which were unabashedly self-interested — Trump had promised to limit regulatory scrutiny of their companies and taxation of their capital. But right-wing tech moguls generally insisted that their fundamental concern was for the country, not their profits: Trump’s pro-business policies would accelerate economic growth and technological progress — thereby ensuring America’s prosperity and global supremacy. Three months into his presidency, Trump has delivered on many of the so-called tech right’s requests for regulatory relief. Yet, to the extent that their faction genuinely cares about maximizing American economic growth, technological progress, and global standing, their investment in Trump has been an utter disaster. Why the tech right backed Trump It isn’t hard to see why right-wing tech moguls believed Trump’s election would advance their interests. To some in their circles, the Democratic Party had become a financial threat. Many venture capitalists were heavily invested in the crypto industry, which the Biden White House regarded as “rife with bad actors.” The Democratic administration therefore discouraged banks from serving many crypto businesses and prosecuted some of its moguls for money laundering. What’s more, Joe Biden chilled mergers through vigorous antitrust enforcement, proposed new regulations on AI development, and suggested taxing unrealized capital gains. All this was antithetical to many tech billionaires’ material interests. And this financial injury was compounded by cultural insults. In the tech right’s view, the “woke” left seemed to disdain success in general and successful white males in particular. And social justice ideology didn’t just irritate the Silicon Valley superrich online; it increasingly fomented insubordination within their workplaces. Donald Trump credibly promised to advance the tech right’s interests along all these fronts. But some Silicon Valley moguls weren’t content to rest their case for Trumpism on grounds of narrow self-interest or cultural grievance. Rather, Andreessen and his fellow VC Ben Horowitz insisted Trump’s election was necessary for safeguarding nothing less than “the future of America.” In their account, the United States was suffering from a crisis of low economic growth and stagnating productivity. Unwise government policies were not merely stymying crypto’s profitability but American innovation writ large. And this posed a threat to liberty both within America’s borders and beyond them. After all, “Low economic growth also means the rise of smashmouth zero-sum politics” in which people come to believe that “gains for one group of people necessarily require taking things away from other people,” Andreessen and Horowitz wrote in a pre-election manifesto. More critically, the United States would not be able to maintain geopolitical supremacy without retaining economic and technological preeminence. And if America did not reign supreme, the Chinese Communist Party would be able to impose its “much darker, more totalitarian” view of global governance upon the world. Trump understood how important it was for the US to “win” in its techno-scientific race against the CCP, according to Andreessen and Horowitz. His election would, therefore, accelerate American economic growth and technological progress while enhancing US power on the global stage. Thus far, Trump has delivered many of the tech right’s narrow demands. Crypto and AI startups face little regulatory scrutiny or pressure to implement DEI programming. But Trump has simultaneously sabotaged America’s economic growth, scientific prowess, and geopolitical influence. Trump’s trade war is undermining American economic growth — in both the short and long term The president’s decision to put across-the-board tariffs on virtually all foreign imports — and 145 percent duties on Chinese ones — has already cost many tech investors and founders dearly. Startups reliant on Chinese inputs have found themselves abruptly on the brink of insolvency. Other firms have been forced to cancel their IPOs amid bearish investor sentiment. The tech right hoped Trump’s election would clear the way for a wave of mergers, enabling venture-funded startups to cash out by selling their businesses to Big Tech firms. Yet his tariffs have eroded the value of major US tech companies, sapping their interest and capacity to buy out startups (while his administration’s approach to antitrust enforcement has proven more adversarial than anticipated). But Trump’s trade war has been even more damaging to the tech right’s high-minded goals than to its narrow pecuniary ones. Bitcoin is still more valuable today than it was before November’s election. The same cannot be said of the S&P 500, which more closely tracks American economic performance. Trump’s tariffs have not accelerated US economic growth. Rather, they have likely ground it to a halt. The Atlanta Fed’s economic growth tracker currently predicts that GDP will contract by 2.2 percent this quarter. Many analysts believe the US economy is already in recession. Perversely, Trump’s trade policies have been especially harmful to American manufacturers, who are more vulnerable to surging input costs than many other businesses. New orders from manufacturers in New York state hit the lowest level on record this month, according to Federal Reserve data. Service-sector businesses have also drastically scaled back capital investment plans in the face of rising costs. Trump’s culpability for this downturn is unambiguous. It is his trade war that is depressing consumer confidence and deterring business investment by driving up costs and increasing economic uncertainty. Needless to say, if a politician unilaterally orchestrates a recession through trade policies he can’t coherently explain, it is difficult to say that his election was vital for economic growth. But what makes Trump’s tariffs truly antithetical to Andreessen and Horowitz’s purported goals is that they are jeopardizing America’s long-term economic performance and geopolitical stature. One source of American economic might is the dollar’s status as the world’s reserve currency. And Trump’s erratic and belligerent trade policies have shaken global faith in the dollar’s safety. Normally, in times of financial volatility, demand for US dollars and Treasury bonds spikes, as investors seek the security of our currency and debt. But during today’s crisis, the dollar’s value has fallen, while yields on US Treasurys have surged. Many financial analysts believe this could be the beginning of a shift away from the dollar, as global investors rethink the reliability of America’s economic and political institutions. If that proves right, America’s borrowing costs would durably increase while its consumers’ purchasing power would lastingly fall, trends that would undermine the nation’s long-term growth. Meanwhile, it is hard to see how anyone preoccupied with enhancing American global power — particularly, relative to China — could be pleased with Trump’s first three months. By violating the terms of America’s existing trade agreements — including some he personally negotiated — Trump undermined our nation’s diplomatic credibility. And by imposing across-the-board tariffs on core US allies, he led European and Asian powers to consider the possibility that China is the more stable and reliable global superpower. In recent days, the Trump administration sought to rally America’s allies into a united front against Chinese trade abuses. But it is struggling to mount such an alliance, according to the Wall Street Journal, because “many European and Asian partners aren’t sure to what extent they are still allied with Washington.” Rather than becoming more adversarial to Beijing, some in the EU are calling for the bloc to end its cooperation with American efforts to starve China of cutting-edge technology. Trump is gutting the tech right’s favorite kind of government spending Trump’s assault on American economic performance and technological progress extends beyond the realm of trade policy. His haphazard cuts to federal funding for both government agencies and private research have been similarly devastating. In their manifesto last year, Andreessen and Horowitz attributed “American technology leadership” partly to “our higher education system, and long-term government investment in scientific research.” Yet the Trump administration has sought to choke off funding to these sources of innovation. Since taking office, it has canceled or frozen billions of dollars in federal science funding and choked off further funds to top research universities, such as Harvard. Economists widely believe this general austerity will slow technological progress and economic growth. Research has estimated that every dollar invested in scientific research and development yields $5 in economic gains. What’s worse, the Trump administration has specifically targeted some of the most promising lines of medical research. Messenger RNA (mRNA) vaccines are among the greatest medical breakthroughs of the past decade. They promise to limit the toll of future pandemics and advance treatments for some of the world’s worst diseases. One recent study suggested an mRNA-based therapy inhibited the recurrence of pancreatic cancer in some patients. Nevertheless, the Trump administration has discouraged universities from seeking grants for mRNA research, announcing all such grants would be reported to Health Secretary Robert F. Kennedy Jr. — a staunch critic of mRNA technology — for review. Trump’s spending cuts have undermined economic progress on other fronts. For example, the administration has proposed $20 billion in cuts to the Department of Energy’s Loan Programs Office (LPO), which provides long-term capital to domestic energy projects that advance America’s strategic interests. Its lending has successfully promoted nuclear energy (one of Andreessen’s avowed causes), mineral mining, and gas infrastructure. Even before Trump, it was already leanly staffed. According to Thomas Hochman of the Foundation for American Innovation, most asset management firms employ roughly 500 employees for every $100 billion in managed assets; LPO has employed closer to 350. In a letter to the administration, 30 think tanks and energy companies suggested that large cuts to LPO’s funding could undermine American energy production. Meanwhile, Trump’s layoffs at the Food and Drug Administration (FDA) are slowing drug development. With the FDA too short-staffed to fulfill its core functions in a timely manner, companies have been forced to postpone clinical trials and drug testing for new medical treatments. The administration is chasing scientific talent out of the US Finally, the Trump administration is jeopardizing America’s access to the most fundamental economic resource: skilled labor. Among the list of pro-growth policies that Andreessen and Horowitz endorsed in their “Little Tech Agenda” last year was an “Expansion of high-skilled immigration to encourage foreign graduates of American universities and others to build new companies and industries here.” But Trump has done the very opposite, exiling foreign students and recent graduates from the United States, thereby discouraging others from immigrating to the country. Specifically, his administration has taken to abruptly terminating foreign students’ visas and ordering them to leave the country. According to a database from Inside Higher Ed, the State Department has changed the legal status of more than 1,000 students and recent graduates at over 170 colleges and universities. In some of these cases, no clear rationale for the visa revocation has been articulated. In many, the cause seems to be the most minor legal infractions, such as receiving a speeding ticket. The White House has also seemingly empowered immigration officials to menace legal immigrants, including esteemed scientists. Kseniia Petrova graduated from a renowned Russian physics and technology institute before being recruited by Harvard Medical School. When Trump took office, she had been working on an investigation into slowing cellular damage from aging. But in February, she was detained at Boston Logan International Airport for failing to declare frog embryos she had transported from France at her university’s request. Normally, this would incur a small fine. Instead, the customs official terminated her visa on the spot and initiated deportation proceedings. Now, she is stuck in a detention center in Louisiana. All this has sent a very clear message to talented, foreign-born scientists both in the US and abroad. A recent poll by the journal Nature found that 75 percent of US-based scientists say they are considering leaving the country. In response, European countries have been aggressively seeking to lure top scholars out of the United States. There is no high-minded case for Trump There are other ways the Trump administration has subverted the tech right’s ostensible ideals. In a post-election podcast, Andreessen and Horowitz complained that, even as the Biden administration had allegedly cracked down on legitimate crypto businesses, it did nothing to combat “all the crazy, fly-by-night meme coins”; Trump proceeded to launch a shady meme coin of his very own. Andreessen also complained that the Biden administration had undermined the rule of law, pressuring businesses into agreements that “you voluntarily agree to it but in an atmosphere of coercion.” This would seem like a fitting description of the Trump White House withholding funds and federal contracts from universities and law firms until those entities agreed to implement the administration’s ideological priorities or provide it with pro bono legal assistance. But it seems unlikely the tech right was ever under the misimpression that Donald Trump had a deep-seated commitment to ethical business practices or lawful government. They were all sentient on January 6, 2021. It is more plausible though that reactionary tech billionaires genuinely believed the Republican would accelerate economic growth and tech progress through tax cuts and deregulation — this is, after all, what global investors seemed to believe in the immediate wake of Trump’s election, if stock market trends are any guide. But Trump has swiftly invalidated the tech right’s high-minded reasons for supporting him. What remains is the grubby, self-interested argument that the crypto industry’s short-term profits matter more than America’s long-term economic health or geopolitical influence. This seems to be a difficult case to make. As Politico has observed, Andreessen’s X feed grew quiet in the wake of “Liberation Day” after he served as one of Trump’s loudest tech evangelists on social media for months. As of this writing, the mogul has not published a post on the platform in over a week.