Musk, Thiel backed Trump and Vance. Will this help tech?

JD Vance’s ascendance to vice presidential candidate on the Republican ticket, with ardent backing by tech investor and megadonor Peter Thiel, may seem improbable given the tech sector’s long-standing role in Democratic Party fundraising.

Yet Thiel’s support of Vance reflects a larger backlash against the power of legacy tech firms in the United States. As some pro-tech Democrats chafe against the Biden administration’s antitrust efforts, and Republicans nominate a former Silicon Valley venture capitalist who has voiced support for those same efforts, it is clear that the tech sector is further splintering politically.

Vance’s rise reflects the power of moneyed tech leaders who unapologetically assert principles of techno-libertarianism, or the idea that technology firms should be free from most government intervention. This view is growing in political power and influence in the GOP. Thiel gave Vance a job in his Silicon Valley venture capital firm and boosted Vance’s successful U.S. Senate campaign in Ohio by $15 million — the largest amount ever contributed to a single Senate candidate, Politico reported in 2022. He also connected Vance with former President Donald Trump. Meanwhile, tech billionaire Elon Musk is financially supporting Trump through his America PAC.

Silicon Valley split

This represents a shift from the tech sector’s reputation as a bastion of support for the Democratic Party. Many startup founders have been based on the progressive West Coast, particularly in California, and for years there’s been a revolving door of Democratic officials leaving D.C. for high-profile roles in Silicon Valley. Against that backdrop, the tech sector has largely furthered the Democrats’ interests — including by serving as campaign staffers, offering digital expertise and acting as major donors.

Yet as the sector has grown, so has the backlash against Big Tech as well as the calls from voters and politicians on both sides of the aisle to regulate the industry. Antitrust efforts, including from current Federal Trade Commission Chair Lina Khan, have rung alarm bells for tech firms seeking to preserve their market share. For his part, blaming the state’s “overregulation” and liberal policy, Musk announced this month that he will move the headquarters of X (formerly Twitter) and SpaceX out of California to Texas, highlighting the widening gulf between the techno-libertarian wing and the Democratic mainstream.

Potentially complicating the picture, Vance has singled out Khan “as one of the few people in the Biden administration that I think is doing a pretty good job.” Khan has brought anti-monopoly lawsuits against large firms including Amazon, so it might appear that Vance supports regulation and oversight. However, it’s more likely that his position reflects a pro-competition streak designed to maximize the number of firms that can compete with the big players. Indeed, Thiel has argued that Google is a monopoly, and he donated to then-Missouri Atty. Gen. Josh Hawley around the time the latter launched an investigation into Google (though Hawley denied any connection between the campaign contributions and his probe of the tech giant).

The techno-libertarians

Thus it seems that the Vance-Thiel alliance is aimed at challenging the firms that have been identified as potential monopolies and now represent an establishment hoarding power away from emergent companies that hope for minimal oversight (such as the startups Thiel invests in, and the EV sector Musk has sought to dominate). Thiel and Musk, as key figures in the techno-libertarian movement, are making a reasonable bet that their regulatory environment will be much more permissive under a second Trump administration. But at the same time, they have signaled openness to policy that weakens the dominant companies.