Off the sidelines: Silicon Valley rushes to raise funds for Harris

The Scoop

Silicon Valley’s wealthy donors are coming out of the woodwork to offer up their homes for Kamala Harris fundraisers, according to a half dozen tech insiders.

The sudden surge in excitement for the Democratic Party comes after a week in which prominent tech industry Republicans were taking a victory lap as Donald Trump, having just survived an assassination attempt, prepared to accept the party’s nomination.

“New people are like ‘ok, I’m ready to come off the sidelines now,’’’ said one organizer of fundraisers. “They weren’t consciously off the sidelines before but they were feeling beleaguered.”

Joe Biden’s support in the tech industry had dropped since the 2020 election, when the group overwhelmingly supported his campaign against then-President Trump.

In Harris, the industry has a candidate who began her career in San Francisco, developing ties with prominent people in tech. OpenAI CEO Sam Altman, for instance, donated to her past campaigns.

In the Bay Area, Harris is known as a moderate Democrat. In her 2003 run for San Francisco’s district attorney, she campaigned to the right of incumbent Terence Hallinan, who was a fixture in city politics but had alienated the police department.

She has also been the face of the White House when it comes to AI policy, representing the US at the UK’s major safety summit on the technology.

And she will be doing a lot more in-person campaign events in the Bay Area focused on donors who’ve amassed tremendous wealth in an unprecedented, two-decade tech boom.

Harris, 59, seems poised to dramatically step up the campaign pace, according to people who work in the tech industry and are helping to plan events. She is now running against the oldest presidential candidate in history in Donald Trump, who is 78.

“People have forgotten what it’s like to have a candidate who can do eight campaign stops a day,” the person said. “We’ve been dealing with these two crusty old guys for how long? Everyone has forgotten what a presidential campaign looks like.”

Another Democratic supporter and tech company executive described a rebound effect, where donors went from the depths of despair to now being elated. “The way I think about it is when you lose your wallet and then you find it, you feel better off than before you lost it,” the person said. “And when you’ve found it again, you feel better spending the money.”

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Bill Clinton, and every Democratic candidate since, have had a fairly easy time courting support in Silicon Valley.

But that didn’t take a tremendous amount of effort, or even policy moves, people familiar with the matter said.

Mainly, it required a bit of face time, answering questions on various technology issues thoughtfully, and taking input.

Barack Obama was famous for tapping tech employees to work in DC in an effort to modernize the federal government, known for its antiquated technology.

His administration would invite tech employees to a White House dinner, where they’d be asked to serve roles in the federal government. At the end of the dinners, Obama would make an appearance. “The close rate was unreal,” said a person who worked closely with the former president.

The Biden administration’s cooling relationship with tech was a mixture of policy and politics. US Federal Trade Commission Chair Lina Khan has taken aim at the industry and made it difficult for large tech companies to make acquisitions. That has cut off possible exits for startups and hurt venture capital returns.

Biden also put forth a proposal to tax unrealized investment gains, which again spooked venture capitalists.

Harris’ work on AI is one area that hasn’t alienated the industry. Biden’s executive order on the technology is palatable to large foundational model companies, according to leaders at those companies.

The one point on AI that Harris has not addressed is questions around open source. It’s unclear how the government will treat such models as they gain capabilities that might create concerns around national security, cybersecurity, and access to information about biological and chemical weapons.

On Tuesday, Meta released the largest open-source AI model to date, Llama 3.1, a 405-billion parameter model. The new offering is nearly six times as large as its predecessor and is likely one of the most expensive pieces of open-source software ever created.

Trump’s running mate, JD Vance, has said he believes open-source AI models are the answer to curbing the power of big tech companies, which he believes are creating AI models with left-wing biases.

The other policy issue Harris could address is cryptocurrency. Securities and Exchange Commission Chair Gary Gensler has been staunchly anti-crypto. If Harris signals that she’s open to a regulatory framework around digital currencies, it would go a long way in gaining support in certain corners of tech.

Reed’s view

While the big story last week was that some prominent names in Silicon Valley, like Elon Musk, Marc Andreessen and Ben Horowitz, came out in support of Trump, the tech industry is still majority Democrat.

Most of those people still would have voted for Biden over Trump, but their support was muted. It isn’t any longer.

In some sense, Biden dropping out is a return to the mean, where Silicon Valley is a big cash cow for Democratic presidential candidates. The big difference is that it is also going to provide a lot of money to Republicans.

But the bulk of the Republican donations will come from a smaller number of people with extremely deep pockets. The downside of that reality is that those donors can be fickle. A great example is Peter Thiel, who was instrumental in his support for Trump ahead of the 2016 election, and has since cut off donations to the former president.

Room for Disagreement

Silicon Valley is still skeptical about Harris as a candidate, if cautiously optimistic. As one entrepreneur and longtime Democratic supporter told me, “The thing I’m watching is simple: will she stay with the Elizabeth Warren wing of the Democratic Party or be like ‘I’m from California. We need innovation and tech policy to be pro-business.’

“Until she does the latter, I think the Democrats have lost the working class and the rich guys/innovation advocates and Trump will likely pull this out.”