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Silicon Valley is betting a Musk-inspired Trump could unleash a startup boom
- Many venture capitalists expect that US President Donald Trump will dial back regulations, potentially making it easier to develop new technologies and do business in Silicon Valley. Many of these hopes are pinned on Elon Musk's involvement in the new administration. Limits on tech mergers and acquisitions have "caused the rate of venture capital return of distributed proceeds to fall drastically, making new capital formation near impossible." Some lawmakers say that allowing a few companies to influence the majority of AI research, development, and monetization poses an economic risk, while many VCs have cried foul and accused FTC commissioner Lina Khan of an anti-business bent.
- While many in Silicon Valley dislike Trump, many VCs and startup founders crave more freedom to pursue riskier new technologies unburdened by regulation. VCs expect possible deregulation to boost innovation, with Musk potentially influencing policies.Trump is considering Musk for White House roles, including ones that would audit various federal programs. VCs anticipate that an innovation boom will drive the US economy in the next four years with the help of aspirational mega projects, visionary initiatives and renewed government investment in the field of space, industrial and defense. Trump is reported to cut corporate taxes and regulations, helping startup M&A and investment.
- Ben Narasin, founder and general partner of Tenacity Venture Capital has said that the most exciting thing of all will be putting Elon in charge of government efficiency, "He's going to take a chainsaw through calcified butter, and it's going to be awesome to attack the bloat and overreach that we've had in the government."
- "Trump-Vance ticket is the first unabashedly pro-tech presidency in our Nation's history," said Augustus Doricko, CEO and founder of cloud seeding startup Rainmaker. Many VCs and startup founders crave more freedom to pursue riskier new technologies unburdened by regulation.
- Trump created the Space Force in 2019, and his close relationship with Elon Musk will bring renewed attention and government investment into the field. "Elon's going to be an enormously positive monster who delivers a cleaned up, slimmed down, pro-business government, and there will be prosperity for everybody," Narasin said.
- Regulatory pressure had dampened deal-making at Google, with the tech giant abandoning two potential purchases this year, including cybersecurity startup Wiz, which would have been one of the tech giant's biggest-ever acquisitions. Many VCs expect US President Donald Trump will dial back regulations, including limiting on tech M&A to enable exits and new capital formation, which is the cycle of innovation. Silicon Valley is looking for the relaxation in the government's stance about crypto technologies and markets. Some VCs expect that Trump could roll back some antitrust and crypto policies that a Harris administration may have continued.
- For example, regulatory pressure had dampened deal-making at Google, with the tech giant abandoning two potential purchases this year, including cybersecurity startup Wiz, which would have been one of the tech giant's biggest-ever acquisitions. The outgoing administration was an antitrust enforcer and put many tech M&As on hold that it deemed anti-competitive. Limits on tech mergers and acquisitions have caused the rate of venture capital return of distributed proceeds to fall drastically, making new capital formation near impossible.
- Mark Pincus, an early Facebook investor, and the founder of Zynga, responded on X, "Effective accelerationism! E-acc," referring to the recent Silicon Valley movement that wants technological advancements in AI to move as fast as possible, without any guardrails. Some investors were critical about what they call unclear rules for cryptocurrency under the Biden regulation. Investors and founders in the space donated to Trump and other Republican candidates, which they consider more favorable toward crypto technologies and markets.
- "With a major push to remove unnecessary red tape and over-regulation in key areas, we could really have a century of crazy building, innovation, and acceleration," Aaron Levie, the CEO of cloud company Box and a Harris supporter, posted on X Wednesday. Many VCs say they're optimistic about the idea of having one of their own helping to call the shots at the federal level.
- Some lawmakers say that allowing a few companies to influence the majority of AI research, development, and monetization poses an economic risk, while many VCs have cried foul and accused FTC commissioner Lina Khan of an anti-business bent. VCs are hopeful that Trump could roll back some antitrust policies and crypto policies that a Harris administration may have continued.
- The US also opened antitrust investigations into Microsoft and Nvidia earlier this year over their dominance in the hot AI space. The Federal Trade Commission is probing Microsoft's aqui-hire of Inflection AI, and the Department of Justice is investigating Nvidia's acquisition of Israeli AI startup Run:ai.
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