Summary: The power in the US shifted from Wall Street to Silicon Valley. Silicon Valley has now an international power never seen in the history of humanity. The goal of this article is to provide the public with some keys and sources to stay informed.
Many big companies, lobbies, mass media and multibillionaires in the US campaigned very openly against Donald Trump. From Wall Street to Silicon Valley, the candidate who was endorsed was Hillary Clinton. The discourse of Trump sounded quite bad for business: rising walls, closing borders and so on. It is bad for Wall Street and it is also bad for Silicon Valley and for every company whose business is based on global markets. It is also bad for Beijing and for Europe always from the perspective of international business and economic growth.
However, after the election of Trump, many from Wall Street and from Silicon Valley knew it was too late to complain and that they had to deal very quickly with the new reality, i. e. use their power to pressure the new administration in the White House to do what is good for their interests and as they say for the American economy. To give just few examples:
- On November 11th 2016, just 2 or 3 days after Trump’s election, Warren Buffet went on CNN Money for a 20 minutes interview and declared that he supports any President and that he is 100% optimistic about America and that the negative predictions about the Stock Market in the case of the election of Trump were “silly”. The interview is available here.
- By the end of November 2016, a former Executive at Goldman Sachs and co-investor with George Soros finds his way to become the Secretary of Treasury (i. e. Minister of Finance) nominated by Donald Trump. His name is Steven Mnuchin. A video of him confirming his nomination is available here. Many others from Wall Street are now surrounding Trump; he has a lot of friends in New York.
- One influential and smart politician from Silicon Valley made also his way to the circle of the White House. His name is Peter Thiel. He is involved in Paypal, Ebay, LinkedIn, Facebook (early investor and on the Board of Directors), etc. He invested in many startups, and also in many politicians. He gave more than $1M to the Trump campaign. Thiel is the politician in Silicon Valley. He studied philosophy and law, was an amazing chess player and is still a great chess master in chess and in real life. Around november 11th 2016, Thiel was named to Trump’s transition team.
- Another move from Silicon Valley is Dex Torricke-Barton who left his position at Space X to “fight Trump and Brexit nightmare”. Articles in the media are abundant about that, for example here. Dex was a speechwriter at the UN, Google, Facebook and then Head of Communication at Space X.
- On November 23rd, in an interview given to the New York Times, Trump said he got a “great call” from Bill Gates and had a “great conversation”. He said he also got a call from Tim Cook (Apple) and talked with him that he would like Apple to produce its stuff in the US instead of China or Vietnam.
It has been already few years that there is a power and a financial shift in the United States from Wall Street to Silicon Valley. This power shift is not just about the fact that Silicon Valley biggest companies possess probably more cash than Wall Street, but it is also about the fact that they detain much more data and the technology to process it. The multibillionaires generation of Warren Buffet and George Soros did not imagine that Artificial Intelligence developed in Silicon Valley will rule Wall Street one day. Computing capacities are already extremely important in the Stock Exchange markets, and the President Obama himself seems very aware of the upcoming situation:
“If you’ve got a computer that can play Go, a pretty complicated game with a lot of variations, then developing an algorithm that lets you maximize profits on the New York Stock Exchange is probably within sight. And if one person or organization got there first, they could bring down the stock market pretty quickly, or at least they could raise questions about the integrity of the financial markets.”
Wired.com, August 2016. Interview of Barack Obama about Artificial Intelligence, technologies and the future of the world.
This shift of power towards Silicon Valley has been commented in the media especially after observers saw big names like Ruth Porat for example moving from being the Executive Vice President of Morgan Stanley to become the Chief Financial Officer at Alphabet Inc. (Google’s mother holding). This has been reported in 2015 in the Financial Times here, or in The Guardian here.
At least half a dozen senior Wall Street (and Washington) figures have made similar moves in the past year — including Anthony Noto, who last year went from Goldman Sachs to become Twitter’s chief financial officer; as well as others from Goldman and Credit Suisse who have headed for Facebook and fellow tech groups. And, as Glenn Hubbard, dean of Columbia Business School, recently told me, the favoured destination of bright MBA students is no longer just Goldman Sachs and other banks. They increasingly prefer to work for tech companies, such as Google.
Financial Times, August 2015. Wall Street’s finest head for the Silicon Valley.
Wall Street lobbies are hated by the world population and have a very bad image. We have just to remember the Occupy Wall Street movement in 2011. Silicon Valley are professionals of technology and communication. They have a much better image or even an excellent image if we think about the average people. They have a very powerful lobbying institution headquartered in Washington and called the “Internet Association”. They have a very beautiful Web Site saying they aim to defend Internet freedom and to represent the users of their companies, i.e. many billions of people. Just to give few examples of the giants that are represented by this association: Google, Facebook, Amazon, PayPal, Netflix, eBay, Airbnb, LinkedIn, Uber, Expedia, etc.
The CEO of the Internet Association has many years of professional experience within the American Congress. His name is Michael Beckerman. On Novermer 14th 2016, i.e. few days after Trump’s election, Mr. Beckerman signed an open letter to the President-elect Donald J. Trump and more precisely to his Transition Team of which Peter Thiel is a member. The integral text of the letter has been made public here. Bloomberg called it the “Wish list”. It has been reported here.
Silicon Valley has enough power to bypass all the governments of the world and their regulations; that is exactly the strategy of the “philosopher” and chess player Peter Thiel who expressed it for example here. Thiel is a key character to understand Silicon Valley dynamics. He is amongst the rare brains in Silicon Valley who studied philosophy, politics and law. His article “The Education of a Libertarian” summarizes very well his ideas about politics and the future of life. Thiel invested money and energy in research about anti-aging, immortality, artificial intelligence, space colonization (with his friend Elon Musk at Space X), seasteading (with his friend Patri Friedman, grandson of the famous economist Milton Friedman).
Another way to get to know what Silicon Valley is working on is to read what Dex Torricke-Barton writes in the newspapers or on his own Facebook page. He has access to all influential media and is backed by Silicon Valley giants like Space X, Facebook and Google. After Trumps’s election he launched a project called Onwards to “unite the world”. The project consists in particular about lobbying and communication.
Reid Hoffman is also a very influential and excellent source of news from Silicon Valley. He is a big thinker and he writes regularly on his LinkedIn. He is the cofounder of LinkedIn, Paypal, etc. He knows everybody and everybody knows him. He also invested massively in the Zuckerberg foundation.
Jeff Bezos, founder of Amazon and one of the richest people on earth, is not really in Silicon Valley, but he is not far at all: between Seattle and Washington. He is not really a writer, nor a politician. He was one of the first investors in Google and we can see from there that he is extremely involved into the global Silicon Valley thing. Bezos invested in everything like Uber, Airbnb, Twitter, but also have massive investments in Space travels, nuclear fusion energy, artificial intelligence, robots, health technology, cancer, etc. The best way to have an idea about his ideas is to read the famous newspaper he bought in 2013 for $250 million: The Washington Post. Bezos will never let any President close the borders or higher custom taxes because that will ruin Amazon business model.
Silicon Valley giants have now the power over all businesses and all democracies in the world, except over the military power, even if they have their own satellites and own launching systems (Space X). The FBI, the intelligence services of the US and from all over the world are not happy about this new concentration of massive data and power in the hands of few companies like Google, Facebook, Apple, Microsoft, Space X. Issues about this hidden power war are also reported in some media like here for example. From the other side of the Globe, countries like Russia, India, China, Japan are very aware about what is happening. There is a cyber war and an obvious arms race.
Nadim M. 