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Silicon Valley CEOs struggle to respond to Trump’s involvement in their businesses
The Trump administration’s increasingly broad reach into private businesses is causing confusion and anxiety in Silicon Valley, home to many of the companies affected.
Interviews with more than a dozen technology executives over the past week revealed that the Trump administration’s announcements of government stakes in companies such as Intel have had a chilling effect, with executives now filtering many decisions through the prism of how the White House might respond. The executives — among them CEOs, founders and investors — requested anonymity to avoid drawing the ire of the administration.
Some have chosen to embrace the administration, hoping to deflect potential criticism from the president. Others are keeping their heads down and staying silent to avoid unwanted attention.
In one case, a tech executive turned down a dinner invitation to the White House earlier this month — and sent a deputy instead.
“I felt it’s better for me to not spend time in the Trump White House,” he said. “The political climate has made it increasingly difficult for technology companies, or any kind of company, to avoid kissing the ring.”
The executive also recounted approaching another tech CEO to sign onto an initiative encouraging all students to learn about artificial intelligence. The CEO agreed — as long as they got support from the Trump administration.
“His knee-jerk reaction was ‘even if it’s something good, I don’t want to make a statement for it, just in case it’s going to piss off the administration,’” said the executive.
Over the past few months, the administration has injected itself into corporate America in extraordinary ways. The Pentagon recently became the largest shareholder in the nation’s only rare-earths mine. This spring, Japan-based Nippon Steel finalized a deal to buy U.S. Steel after agreeing to give the U.S. government a so-called golden share — making it a stockholder in the company.
Many of the administration’s interventions in businesses have targeted Silicon Valley, unnerving executives there. The tech industry plays an outsized role in the stock market and broader economy. The seven biggest tech stocks alone make up more than a third of the S&P 500.
Last month, the administration struck a deal with Nvidia CEO Jensen Huang that would allow the company to sell its H20 chips to China under the condition that the government receive a 15 percent cut of its sales. It made a similar deal with semiconductor giant AMD.
Most notably, the White House and Intel CEO Lip-Bu Tan announced in August that the government would take a 10 percent stake in the company. After Trump said Tan had too much exposure to China and called for his firing, the executive went to Washington to try to appease the president and signed off on the government’s acquisition.
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“They said it’s a passive stake but with this administration, does it stay that way?,” said Stacy Rasgon, senior semiconductor analyst at Bernstein Research. “What happens if Intel needs to do something that’s misaligned to what the government or, frankly, what Trump personally wants? The government is now picking winners and losers — the whole thing sets a bad precedent.”
“Clearly he fumbled the ball,” said a former Intel executive, referring to Tan. “If you’ve found yourself in that spot, where the government now owns a piece of the company, you’ve really messed up.”
To be sure, tech executives have always been careful in their dealings with Washington, but the nature of the relationship has changed, said the executive who turned down face time with the president.
“There was an incredible amount of idolatry with the Obama administration as well,” he said. “I think what’s unique with the Trump administration is it feels much more quid pro quo.”
Executives at larger companies have sought to get close to the administration. In August, Apple CEO Tim Cook gave Trump a customized plaque with a 24-karat gold base.
At a White House dinner with tech executives earlier this month, Cook said “thank you” to the president nine times in two minutes. Microsoft founder Bill Gates, who previously said “kids will die” because of the administration’s cuts to foreign aid, also praised Trump’s “incredible leadership.”
Microsoft declined to comment. Gates Ventures and Apple did not respond to a request for comment.
“There’s a phrase called, ‘It’s better to be inside pissing out than outside the tent pissing in,’” said one tech founder and investor. “You’re better off inside with this administration.”
Another tech executive described the dynamic in schoolyard terms. “It feels net positive if you’re talking to the president and probably neutral to negative if you’re not talking to him” he said. “You probably want to have discussions with the bully instead of hoping he doesn’t find you in the schoolyard.”
“You want to be partnered with [the administration]. Kiss the ring, whatever needs to be done,” said one tech investor. “The prior administration said we want to regulate you … now CEOs feel like they have a voice.”
Smaller and midsized companies, however, are taking a different approach, choosing strategic silence in hopes of avoiding the administration’s unpredictability. Many of these companies are relatively unknown outside Silicon Valley, which allows them to avoid unwanted scrutiny.
“I don’t even think Trump knows what Snowflake, Workday or Palo Alto Networks do,” said one CEO. “A vast majority of the companies can fly under the radar.“
“It’s a combination of fearfulness and doing whatever you can to not put a target on your back,” said another tech executive. “The smart ones can play both sides of it but you’re not on a level playing field.”