Tesla owner Elon Musk, right, was hardly alone in the tech sector in supporting the reelection efforts by Donald Trump, left. Many Silicon Valley investors and innovators were hoping for a lighter regulatory hand than they have seen under President Joe Biden. (Photo by Brandon Bell/Getty Images)

Some venture capital investors, who have funded the tech boom in Silicon Valley and beyond, say they are excited by the prospect of a lighter regulatory environment under a new Trump Administration than they saw under President Joe Biden.

But they warn that Trump policies that will benefit many technology companies may come at a cost to other pro-Trump voters.

The Bay Area bubble of Silicon Valley, which is home to institutional tech giants like Apple, Google, Intel and Adobe, had been previously seen as a left-leaning region, like many other California communities. But the 2024 election was a unique one, venture capitalists and founders say.

“There’s been a significant shift in the valley rightward since the last election,” said Joe Endoso, a Silicon Valley investor.  “And you’ve seen that in the financial flows — in the level of dollars — that were directed towards supporting President Trump’s campaign from the technology sector.”

Endoso, president of financial tech platform Linqto, said some tech industry people who previously voted for progressive issues and candidates this time cast their ballot for Trump. He said he’s heard more concern about potential regulations in the tech industry and negative economic effects under continued Democratic leadership.

This turn toward Trump wasn’t universal in the Valley. The majority of donations from employees at companies like Google, Amazon and Microsoft went toward Democratic candidate Kamala Harris, Reuters reported in September. But tech billionaires like Elon Musk and venture capital investors, like Andreessen Horowitz co-founders Marc Andreessen and Ben Horowitz, poured millions into his campaign.

While Trump didn’t receive unanimous support from the tech sector, many American tech giants and investors are excited about the light-handed approach to tech regulation that’s likely to come in the next four years. Congress has struggled to pass any federal laws around emerging technology like AI, though states have done so on their own on issues like data privacy, transparency, discrimination, and on how AI-generated images can be used.

The Biden administration, however, on its own issued a number of “best practice” guides for emerging technologies and aggressively pursued antitrust cases against some tech giants, including an ongoing case against Google that could force the company to spin off its popular Chrome web browser.

It appears unlikely that Trump will continue the Biden era regulatory and enforcement drives.

Those working in emerging technologies like AI are making advancements so quickly that regulators are unlikely to be able to keep up anyway, Endoso said. The tech industry mindset — move fast and break things, first coined by Facebook founder Mark Zuckerberg — will likely continue under Trump’s administration.

“You’re running through walls and hoping that when the regulations come about, they’re not going to be so, you know, restrictive,” Endoso said. “But you’re not going to sit and wait for the regulators. You can’t afford to.”

Why care about the VC market?

Venture capitalists pour money into many promising startups in Silicon Valley and elsewhere, looking for the ones that will create lucrative new technologies or “disrupt” existing ones. Silicon Valley successes include Uber, which received its first round of venture capital investment for just about $1.3 million in 2010, and Airbnb, which started with just a $20,000 investment in 2008. Today, the companies are worth $146 billion and $84 billion, respectively.

Many more, however, fail. High-visibility startups that folded after raising very large sums include streaming platform Quibi, which raised $1.75 billion and ChaCha, the SMS text-based search platform that had raised $108 million.

The high-risk, high-reward nature of the industry makes for a rarified business, and there’s a high barrier to entry. To become an accredited venture capital investor, one must have an income of at least $200,000 a year, or be worth $1 million. The handful of firms pouring the most money into the United States technology market are usually worth billions.

Yet, the technology being developed and funded by wealthy investors today will shape the next decade of everyone’s lives. Some of the most influential technology in the global economy has been released under President Joe Biden’s administration in the last three and a half years.

Advancements in generative AI and machine learning technology, rapid development of augmented and virtual reality, further adoption of cloud computing and Internet of Things (IoT) technologies, such as internet connected appliances and home devices, along with automation of many industries have already shifted much of American life. ChatGPT, one of the most recognizable examples of generative AI that the public can use, was only released two years ago, but the sector of generative AI is already threatening many American jobs.

Those with writing-focused careers like copywriters and social media marketers, are already feeling the disruption, and experts believe STEM professionals, educators and workforce trainers and others in creative and arts fields are going to see much of their job responsibilities automated by AI by 2030. 

The venture capital market has been a volatile one over the last four years. Though many of Trump’s attacks on Democrats during his campaign cycle centered on the healthy economy under his first term, the COVID-19 pandemic was the single-biggest economic factor to disrupt the venture capital market and others.

The U.S. saw its biggest year for venture capital investments in 2021, but supply-chain issues and the continuing reliance on remote work changed the trajectory of many companies’ plans to go public on the stock market. High inflation and interest rates have kept many investors from deploying capital and many companies from completing mergers and acquisitions since then, although the second half of 2024 is looking up.

The economy quickly became the number one issue for Americans in the presidential election cycle. And though thriving venture capital markets usually benefit those that are already wealthy enough to invest, we’ll likely see a positive correlation in the general markets too, said Scott Nissenbaum, president and CEO of Ben Franklin Technology Partners, an innovation-centered fund in Pennsylvania.

“A thriving, efficient market is good for venture capital. And the flip side is also true,” he said. “We feed into and create the innovations and the efficiencies and the next generation … that create the robust and the boom.”

How investors and founders are preparing for Trump 

Nissenbaum predicts that Trump may remove regulations for technology used by U.S. transportation and military systems, allowing for more tech integration than previously permitted without human safeguards in place. That might look like more flight optimization technology, or more drone usage by military branches. Nissenbaum also thinks Trump will attempt to open up space travel, especially with big backing by Musk, who runs SpaceX.

Health care also has been implementing technology rapidly, and Nissenbaum believes could see some major changes under Trump.

That is of note for healthtech founder Sipra Laddha, an Atlanta-based psychiatrist and cofounder of LunaJoy, which provides in-person and virtual wellness visits for women. The three-year-old company raised venture capital in 2022 and 2023, despite a more challenging fundraising market. Women’s health care companies saw a surge of VC investment in the wake of the overturning of Roe v. Wade in June 2022, an exception to the generally slower investment market at the time.

But she is uncertain about how Trump’s potential cabinet appointees, like Robert F. Kennedy Jr., who was appointed to head the Department of Health and Human Services, will affect LunaJoy’s operation. Kennedy has made health a key issue in his public advocacy and political activity, but he has also espoused eccentric and even false views on issues such as vaccines and pharmaceuticals.

“When women don’t have choices, mental health is significantly worse, and that’s something that goes on, often, for the entire time of that family’s trajectory,”  Laddha said. “So I’m not quite sure what’s going to happen, but you know, those are certainly things that, as a women’s mental health company, we are looking at and watching closely to see what sort of legislation, rules and laws come out.”

When it comes to fundraising early next year, Laddha is optimistic. She’s focused on how fragmented the healthcare industry is right now, and plans to showcase how companies like hers will aim to integrate with larger health systems.

“Our role is to be really as disruptive as possible, and to bring to the forefront the most innovative solutions that we can do while still working within the current framework of healthcare that exists today,” she said.

Some sectors worry about Trump economic policy

While software and cloud-based technologists seem excited by the effects of deregulation, startup founders that make physical products, especially using microchip technology, are wary of Trump’s plan to impose tariffs on imported goods.

Samyr Laine, a managing partner at Los Angeles-based Freedom Trail Capital, specializes in consumer tech and consumer packaged goods. Laine said he feels a sense of relief in ending the “uncertainty” around who will take the presidency the next four years, but he predicts many founders will feel the costly effects of Trump’s planned tariffs, and pass those additional costs to consumers.

Though the existing companies in his portfolio won’t be hit too hard, it’s a factor they’ll be forced to review when considering investments in companies in the future. Those that will incur the additional costs of imported goods will have to adjust their profit margins and might not be as attractive to investors.

“As a consumer and someone who isn’t in the space, not to be like a fear monger, but expect that some of the things you typically pay for, the price will go up,” Laine said.

The effect on work

Although Trump was successful in picking up a significant amount of tech industry elite support this election season, much of his voter base is working class people who will not feel the positive effects of tech industry deregulation.

Endoso, the Silicon Valley investor and founder, says the Trump coalition of tech entrepreneurs and working-class voters represents “a division between the haves and the have-nots.” The usual basis on which people pick their electoral preferences, like race, geography, income and proximity to city life, were “shattered” this time around.

“It was a revolt of the working class, at least in my view,” he said.

The advancements of AI and machine learning, which will enrich the investor class, will have large implications on employment for those working class voters. The vast majority of Americans who are not college educated, and work physical jobs, might struggle to thrive, he said. We’ll likely see overhauls of industries as robots replace and automate a majority of physical labor in warehouses, and self-driving vehicles take over jobs like long-haul trucking and ride services such as Uber and Lyft.

“I think those are important questions to be asking from a policy standpoint, and I think that the intelligent answers shouldn’t be ‘let’s shut the innovation down.’” Endoso said. “That didn’t work in 19th century England. It won’t work here today, right? But it does require our rethinking the definition of work, and the definition of how you … organize a society along lines where you don’t need to have the same level of maybe direct labor input as we had in the past.”

Nissenbaum agreed, saying that AI has already begun to leak into every field and industry, and will only continue to disrupt how we work. As revolutionary as the internet and internet companies were in the late 1990s, the web has become the infrastructure for artificial intelligence to become more efficient and effective at everything it does.

With lighter regulation under a new Trump administration, we’re likely to see AI develop at unpredictable rates, he said. And laborers will definitely be feeling the effects over the next four years.

“You’re not going to lose your job to AI,” Nissenbaum said. “You’re going to lose your job to someone who understands how to do your job with AI.”

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The Milwaukee Police Administration Building downtown. (Photo | Isiah Holmes)

Back in July, a lot happened while the Republican National Convention (RNC) was going on in downtown Milwaukee. Donald Trump accepted his party’s presidential nomination. Local residents protested the RNC. Out-of-state police killed an unhoused man in King Park, and the convention brought so much traffic to the gay and bisexual dating app Grindr that it crashed. Those events and more were probably followed by the Milwaukee Police Department (MPD) using a new tool to scan, scrape and search online activity. 

In April, the MPD announced that it was seeking an open source intelligence tool ahead of the RNC. Basically, anything which can be openly seen and accessed online counts as open source intelligence. Using the tool, the MPD planned to augment its online monitoring capabilities. What would have taken hours just a few years ago could be reduced to minutes. By the end of May, MPD had settled on an Artificial Intelligence (AI) powered software called Babel Street. The contract for Babel Street, which was not to exceed $43,673.50, was awarded on May 23.

A Request for Proposal (RFP) document, compiled by the Pewaukee-based technology brokerage company Abaxent, provides details on Babel Street. The document was obtained by Wisconsin Examiner through open records requests. Utilized by the U.S. Armed Forces, intelligence agencies and the federal government, Babel Street “empowers users to extend their search to the farthest corners of the globe, netting data beyond the traditional scope of [publicly available information] in a safe and secure environment,” the RFP document states. “It opens the door to enriched and standardized [publicly available information] data from over 220 countries.”

Not only can Babel Street search online content in over 200 languages, it also employs “sentiment scoring” in over 50 languages. A Babel Street glossary of terms webpage states that sentiment analysis involves determining “if a given text is expressing a positive, negative sentiment or no particular sentiment (neutral).” The RFP document also claims that Babel Street’s use of AI “accelerates investigations and uncovers connections.”  

An MPD spokesperson echoed that point, saying in an emailed statement to Wisconsin Examiner that the software has “increased the speed of investigations.” The spokesperson said that Babel Street is used by MPD’s Fusion Division. Social media investigations are a staple for Milwaukee’s Fusion Center, composed of both MPD’s Fusion Division and the Southeastern Threat Analysis Center (STAC). Originally created for homeland security, the Fusion Center serves a variety of roles today — whether that’s operating the city’s Shotspotter gunshot surveillance system, monitoring a camera network spanning Milwaukee County, conducting ballistic tests, accessing phones seized by officers, or processing information from cell towers. 

Within the Fusion Center, analysts assigned to the Virtual Investigations Unit monitor social media, investigating not only people but entire social ecosystems. Babel Street “pinpoints key online influencers, allowing investigators to explore networks from a powerful starting point,” the RFP document states. “Rapidly exposing and unlocking their web of relationships delivers crucial information in a matter of minutes.” All of that data then gets plugged into sophisticated visualizations such as maps, algorithmic scores, or graphs. “Visualized mapping unearths influencers who have the greatest impacts on organizations, senior leaders, and world events,” the document explains. “Advanced algorithms score and prioritize critical online entities to measure this influence, bringing to the forefront obscure identities that make up their network.” 

Babel Street can track the growth of online influence emanating from a person or group of interest to police. Investigators can also set real-time updates alerting them to new developments online, as well as “persistent” monitoring. “A persistent Document Search on an identified threat actor continuously monitors filtered topics the actor is publicly engaging in,” according to the RFP document. “By establishing a persistent collection via user-built filters/queries, users can not only increase their data access and insight, but they can also automate the rate aspects of analysis.”

 

Contract B20203, Purchase Order PUR20203 (RNC Open Source Tool – Abaxent response)_Redacted

Records from the City of Milwaukee Purchasing Division, obtained through open records requests.

 

Babel Street draws on a wealth of online information to gather intelligence for police. An aspect of the software known as “Synthesis” allows MPD “to understand the profile of key influencers based on attributes, such as person/organization, location, occupation, interests, areas of influence, and communication style, which are automatically tagged for millions of accounts using an AI model, while still giving the City the option of manual tagging.” Babel Street also allows MPD to pair keyword searches with geo-fencing, thus alerting the department to posts within a specific geographic area. MPD’s new open source intelligence tool also enables data to be extracted from the dark web — parts of the internet which are not indexed in search engines and require specialized internet browsers to locate.

The ability of law enforcement to map online connections between people worried privacy advocates leading up to the RNC. In early April, the American Civil Liberties Union (ACLU) of Wisconsin and Electronic Frontier Foundation (EFF) warned that using an open source intelligence tool, MPD could more effectively track and profile people who were exercising their constitutional rights. David Maass, director for investigations at the EFF, told Wisconsin Examiner that open source intelligence tools “are designed to produce ‘results’ even if there’s no evidence of a nefarious plot.” 

Many police reform activists in Milwaukee also remember the protests of 2020, when police departments heavily relied on social media to surveil protesters. All of that information, however, takes time to collect and sift, especially when a department may only have so many analysts on hand. “No longer are analysts manually checking multiple data sources to identify changes,” according to  the RFP document, “as Babel Street Insights persistently and automatically collects, ingests, and alerts users when new information is available, dramatically increasing the efficiency and effectiveness of each analyst.” 

All of that information, however, also needs to be vetted to ensure that it’s accurate. “Intelligence often requires vetting in order to determine whether it is reliable or not,” MPD’s spokesperson wrote in an email statement. “Additional investigation would be required with all intelligence.”

MPD said that it does not track Babel Street’s involvement in investigations, either during the RNC or after. There is also no standard operating procedure governing the software’s use by MPD, a spokesperson told Wisconsin Examiner. “This software is utilized to investigate crimes or to assist with mitigating threats to pre-planned large-scale events,” wrote the spokesperson in a statement. No decisions have been made yet about renewing the MPD’s one-year contract for Babel Street. 

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