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Silicon Valley’s Civil War

Tech’s leadership is splitting into two elites—and the battle between them will shape America’s future

by
Nadia Asparouhova
May 15, 2023
Original images, clockwise from top left: Fabrice Coffrini/AFP via Getty Images; Michael Kovac/Getty Images for Vanity Fair; Philip Pacheco/AFP via Getty Image; Justin Tallis - WPA Pool/Getty Images
Original images, clockwise from top left: Fabrice Coffrini/AFP via Getty Images; Michael Kovac/Getty Images for Vanity Fair; Philip Pacheco/AFP via Getty Image; Justin Tallis - WPA Pool/Getty Images
Original images, clockwise from top left: Fabrice Coffrini/AFP via Getty Images; Michael Kovac/Getty Images for Vanity Fair; Philip Pacheco/AFP via Getty Image; Justin Tallis - WPA Pool/Getty Images
Original images, clockwise from top left: Fabrice Coffrini/AFP via Getty Images; Michael Kovac/Getty Images for Vanity Fair; Philip Pacheco/AFP via Getty Image; Justin Tallis - WPA Pool/Getty Images

With an estimated net worth of over $1 billion, Marc Andreessen, co-founder of the Netscape browser and venture capital firm Andreessen Horowitz, is far from an everyman. And yet Andreessen’s biting criticisms of the “entrenched oligarchic structure of the present regime” have made him one of the surprising figureheads of a growing anti-elite movement that could—depending on which side wins out—reshape America’s political and social future.

Andreessen is one of the more prominent names in a new class of tech wealth that includes figures like Elon Musk and Peter Thiel whose political vision and methods conflict both with dot-com tech titans like Bill Gates and Pierre Omidyar, as well as with those of old world industry and media, like Rupert Murdoch and Ted Turner. While it might seem strange, given his own position of power, for someone like Andreessen to criticize elites, the truth is that elites have cliques, just like the rest of us. And in the cafeteria of America’s billionaires, Andreessen and his peers are hurling food and spoiling for a fight, while the incumbents are calling in favors at the State Department and New York Times.

Of course, neither camp is driven solely by high-minded ideals, but both maintain fundamentally irreconcilable views of the kind of country they want to build. While Reid Hoffman and Pierre Omidyar, respectively, founders of LinkedIn and eBay, pledged $27 million to help artificial intelligence “vindicate social values of fairness … and justice,” Andreessen publicly laments the ill effects of training artificial intelligence on the “woke mind virus.” Marc Benioff’s company, Salesforce, announced last year that they would tie executive pay to environmental, social, and governance (ESG) initiatives, which Andreessen has sharply criticized.

While these disagreements may look like a contest between conservatives and liberals, the reality is not that simple. Garry Tan, a successful investor who is now the president and CEO of famed startup incubator Y Combinator, has been a vocal critic of San Francisco’s progressive politics in recent years, while affirming that he has “always been and likely will always be a Democrat.” He and Andreessen, like others, appear to believe instead that this disagreement is centered around the embrace or rejection of a certain set of principles—uncovering and amplifying the best talent, valuing meritocracy over credentialism, fixing problems by circumventing institutions, and thinking from first principles—which underpin the tech industry’s runaway success.

Both camps also believe that the other team is the root of the country’s (and maybe the world’s) problems. It’s a fight worth watching, and understanding, because its outcome will have long-term implications for all of us.

From the late 1990s through the late 2010s, the dominant American elite was represented by what political scientist Samuel P. Huntington once called the “Davos Man”—a reference to the Swiss resort town where the World Economic Forum (WEF) holds its annual conclave of elites—who believe that an interconnected global citizenship is the key to humanity’s future. Their worldview relates to the way they made their wealth, starting with an investment banking boom that was driven by decreased regulation and technical advances in computing in the 1970s and 1980s, combined with the birth of the internet. Today it is dominated by executives in finance and management consulting, who mingle with early tech pioneers, academics, and NGO executives.

The Davos elite view the improvement of society as a management consulting problem, like estimating the number of pingpong balls in South American coastal resorts or mapping out the supply chain issues of the Fortune 100, which is precisely what made them successful in the business world. It’s marked by trends such as social entrepreneurship, impact investing, triple bottom line, and ESG, lauded for their professionalized ways of improving the world while (or by) making it more efficient.

This philosophy was accelerated by developments taking place in the late 20th century, when digital technology made global commerce and communication even easier to realize, and liberal democracy’s triumph over Soviet communism was thought to mark the end of grand geopolitical wars. The institutions birthed in that era reflected this view of the world: the Clinton Foundation, with its vision of global interdependence; the Bill & Melinda Gates Foundation, which focused on global health and reducing extreme poverty; George Soros’ Open Society Foundations, chiefly concerned with spreading democracy throughout the world. Certainly, these organizations have achieved some laudable accomplishments. The Gates Foundation, for example, single-handedly revived the field of malaria research and helped vaccinate millions of people from measles and tuberculosis.

By focusing on global issues, however, America’s Davos elite let its attention drift from the homeland. Because they came of age in the internet and global commerce era, they primarily identify as citizens of the world, rather than any one nation-state. The New York Times called this group “new globalists” as far back as 1972, noting their belief that “multinational business is creating the basis for peace and a new world order.” The collective power of these multinational corporations and nonprofits seemed to supersede American hegemony. A wave of global associations formed to consolidate and amplify this denationalized power, including the World Economic Forum, the Business Roundtable and the Trilateral Commission.

In the late 1990s, the internet—and the data it contains—became a primary “resource” for this new, stateless society to control. Under the stewardship of the Davos elite, the American federal government, instead of being made to serve its own people, was repurposed as a globalized tool to manage and secure stores of data. In the mid-2010s, just prior to the tech backlash, FBI Director James Comey pushed aggressively for Congress to mandate the inclusion of so-called “backdoors” in the products of tech companies like Apple and Google, which would be used by federal surveillance agencies. Apple vigorously pushed back on this request, stating in a public letter that backdoors would “undermine the very freedoms and liberty our government is meant to protect,” and affirming that their dissent came from “the deepest respect for American democracy and a love of our country.”

True American values—entrepreneurialism, liberty, meritocracy, ambition—were minimized or discouraged by the Davos elite. In a 2016 essay that is no longer published on the WEF’s website, Ida Auken, a Danish politician and WEF member, penned “Welcome to 2030,” a speculative vision of the future. “I own nothing, have no privacy, and life has never been better,” Auken wrote, depicting a dystopia that defies parody. “Once in awhile I get annoyed about the fact that I have no real privacy. Nowhere I can go and not be registered [but] all in all, it is a good life. Much better than the path we were on, where it became so clear that we could not continue with the same model of growth.”

The Davos elite sees a more connected world as the highest form of society. This notion of “connectedness,” initially conjuring a vision of people that can overcome their differences and work peaceably together, began to glitch and take on a more sinister tone in recent years. “Connectedness” now conjures up images of a society in which each person can be measured, tracked, and analyzed. Klaus Schwab, the World Economic Forum’s founder and executive chairman, has publicly embraced this vision as “Globalization 4.0,” which entails the use of artificial intelligence and data surveillance to bind the world together and place people across the globe even more fully under the watchful authority of those who control the data.

Connectedness now refers to making sure that each person can be measured, tracked, and analyzed.

In seeking to control the internet as a resource, the United States’ ruling class hamstrung what had been an extraordinary tool for creativity and exploration. It is this spirit of creativity and exploration that Andreessen and his peers seek to preserve. Andreessen joins a rising set of counterelites who view unconstrained individual ambition as the key to human flourishing, admonishing the “smug complacency” that characterizes today’s elites, as Andreessen once put it, and lamenting the lack of vision across the public sector. Housing, for example, is difficult to build in cities with strong economic potential, Andreessen argues, and “the last major innovation in K-12 education was Montessori, which traces back to the 1960s.” The counterelites believe they can use their vast resources to take the difficult moonshots that no one else can or will attempt, with widespread benefits to humanity if they succeed.

After finance, tech is now the second-most-common industry represented among the world’s billionaires, and is by far the best-capitalized: tech billionaires’ collective net worth—$2.5 trillion, by Forbes’ 2021 estimate—is now nearly double that of those who made their wealth in fashion or finance. California is home to the most billionaires in the country, half of whom made their fortunes in Silicon Valley.

But while the tech industry has now taken its place at the head of America’s elite institutions, it began with a mission to disrupt old patterns of business, captured by Facebook’s early motto: “Move fast and break things.” Those who came up in tech in the late 2000s and 2010s spent their early careers building apps at hackathons instead of worrying about advanced degrees. While waiting for their code to compile, they skimmed Hacker News, not The New York Times. Conversation and debate between these figures happened on Twitter, blogs, and Substack, not mainstream media networks. Their views on society came from reading the writings of Scott Alexander or Paul Graham, rather than college assignments or think tank policy briefs.

In this environment, founders routinely turned down high-paying jobs at management consulting firms and hedge funds in order to start fledgling businesses with uncertain outcomes. This fostered a new set of cultural values and myths that rival the ones upheld by older elite institutions. In the new ethos of Silicon Valley, talent matters more than credentials. The individual is prized as the fulcrum of social change—a truly talented and ambitious person can accomplish just about anything, so long as they aren’t impeded by obtuse regulations.

After wealth began to gush like oil from the fertile grounds of San Francisco, some founders sought to shed their image as disruptors and join the world of respectable elites. It is a familiar story in America: Entrants to the new money club who, rather than lord it over older groups of elites, try to buy their way into the prestigious, old money world. Marc Benioff, for example, the co-founder and CEO of the software company Salesforce, is on the World Economic Forum’s board of trustees. Slack co-founder Stewart Butterfield and his wife, Away co-founder Jen Rubio, donated $25 million to UNICEF during the COVID-19 pandemic. Box co-founder Aaron Levie sponsors and attends charity galas with his wife, Joelle Emerson, who is the co-founder of DEI solutions provider Paradigm. Levie has stated that he shares Benioff’s interest in the intersection between philanthropy and profit—a concept that originated with, and is heavily promoted by, the Davos elite.

While all these founders made their money in tech, their public role is now fundamentally indistinguishable from the elites that came before them. Even the most commonly cited example of tech-flavored philanthropy—effective altruism, or EA, a philanthropic movement that emphasizes efficiency and measurement—merely optimizes charitable giving rather than attempting to rewrite the system itself. Despite its adjacency to tech, EA is genetically closer to the philanthopic view of Gates- and Buffett-style giving, as it shares their preoccupation with global cause prioritization and an algorithmic approach to problem solving.

In the new ethos of Silicon Valley, a truly talented and ambitious person can accomplish just about anything, so long as they aren’t impeded by obtuse regulations.

Others in tech, however, like Andreessen or PayPal founder Peter Thiel, view their professional success as validation that they know a better way of tackling humanity’s biggest challenges. Rather than seeing tech as a means to an end—no different from making money in finance or real estate—this group sees tech’s true innovation as a fresh system of values capable of accelerating progress and improving society, which could be applied beyond a business context.

The Thiel Fellowship was one of the earliest endeavors in this vein, a program launched in 2011 that gives young people $100,000 to drop out of college and work on their own ideas. Its alumni have generated billions of dollars in value and, perhaps more importantly, paved a new, respectable path for those who favor impact over Ivy League credentials.

For the counterelite, the founder archetype—a single individual with unconstrained ambition—is uniquely and characteristically American. Founders benefit from network effects, or a concentration of talent in one place, and that means America takes on central importance for the counterelite as a beacon to attract the world’s best and brightest. Katherine Boyle, who launched Andreessen Horowitz’s American Dynamism initiative last year, stated in her manifesto that the tech sector can be used to rebuild the public institutions “that we used to trust, especially those in the realm of government.” Her position presents a clear reversal of the Davos worldview, which de-emphasizes nationalist policy in favor of globalism.

The pandemic offered tech’s true believers an opportunity to experiment with putting these values into practice. Stripe co-founder Patrick Collison, for example, along with biology researcher Patrick Hsu and economist and blogger Tyler Cowen, started a grant program called Fast Grants after learning that scientists were “stuck on hold” waiting for federal funding from the National Institutes of Health (NIH). They raised more than $50 million for COVID-related research and distributed it at lightning speed, organizing a panel that reviewed researchers’ applications and awarded funding in less than a week.

Ryan Petersen—founder of Flexport, a supply chain logistics software platform—rented a boat and toured the Port of Long Beach in October 2021 in order to study the pandemic-induced supply chain crisis first hand. At 6 a.m., Petersen published a Twitter thread that chronicled what he learned—noticing, for example, that zoning laws prevented stacking containers more than two high, leading to backups. The thread went viral and by 3 p.m. that same day, Long Beach had temporarily changed its zoning laws in response to his recommendations. Petersen was not a tech celebrity with a mainstream media presence; he did not donate to electoral campaigns or employ a lobbyist to accomplish his goals. Instead, he leveraged deep expertise, a “first principles” approach, and a social media platform to make his desired impact.

At the start of the pandemic, tech was the first among laymen to realize that the virus’s spread would follow an exponential growth curve, which they were accustomed to spotting in the growth trajectories of startups. “What if this coronavirus is the pandemic that public health people have been warning about for years?” tweeted Balaji Srinivasan, the entrepreneur and investor who co-founded Counsyl, a genetics testing company, and taught bioinformatics at Stanford. “It would accelerate many pre-existing trends,” he continued, rattling off a list of possibilities that now feel like bitter memories: border closures, nationalism, social isolation, preppers, remote work, face masks, distrust in governments. His tweet was published on Jan. 30, 2020.

Popular media outlets were not impressed by tech’s fears. “Don’t Worry About the Coronavirus. Worry About the Flu,” proclaimed one BuzzFeed article, whose author cited statements from the Centers for Disease Control that COVID-19 posed a low risk to the American public, then fretted over the “onslaught of sensational disinformation” on social media platforms. Vox published a mocking article on Feb. 13, 2020, titled “‘No handshakes, please’: The tech industry is terrified of the coronavirus”; the headline refers to a sign that was posted on Andreessen Horowitz’s office doors.

Despite the media’s bemusement, the San Francisco Bay Area was the first region in the United States to issue a stay-at-home order, and California was the first state to enact a statewide shelter-in-place order. Tech companies like Twitter, Google, and Facebook were some of the first employers to enact work-from-home policies, starting in early March. At first, it seemed that tech was united, aligned in its intuitions against the default way of thinking.

But as the rest of the country joined the panic, stay-at-home orders and mask mandates—initially celebrated within tech—turned into symbols of unyielding institutionalism. Tech split into two camps, mirroring the schism between its elites: There were those who continued to defer to public health authorities and uphold the mandates for as long as they were told, and those who were disillusioned by the CDC’s lack of leadership, preferring instead to use their own judgment.

The CDC’s poor pandemic response had demonstrated that institutions were incapable of dealing with a genuine crisis, but could tech step up and build something new? While more people now shared the counterelite’s position that our current institutions could not be relied upon to manage our most pressing social needs, any optimism about better alternatives was tempered by the prevailing lukewarm sentiment toward tech. Many were still distrustful of tech’s ability to build things that improved, rather than harmed, humanity.

While the pandemic brought these concerns to the foreground, tech skepticism started brewing as far back as 2008, as global elites watched with a mix of curiosity and apprehension as Mark Zuckerberg, once an awkward college student, became the world’s youngest self-made billionaire at the age of 23.

Zuckerberg wanted to do things a little differently from the elites, but he quickly made himself unpopular among his peers—a loner in the billionaire’s cafeteria. He started off traditionally enough, with a $100 million gift to the Newark, New Jersey’s public school system and a signature to The Giving Pledge, the in-group social contract created by Gates and Buffett in 2010. But his Newark initiative failed to produce memorable results, and in 2015, when he launched his first major philanthropic initiative under his own name—the Chan-Zuckerberg Initiative (CZI)—he followed in the steps of Emerson Collective, the philanthropic initiative founded by Steve Jobs’ wife, Laurene Powell Jobs, and structured it as an LLC instead of a 501(c)(3). This meant, among other things, that CZI would not be legally bound by the same accountability requirements as other foundations, and could invest in for- and non-profits, which caused a stir in the media and within the philanthropy sector.

In early 2017, following the 2016 presidential election that rattled the Democratic Party, Zuckerberg conducted a “national tour” of America, riding tractors and shaking hands and leading many to speculate upon his political ambitions. But Zuckerberg controlled Facebook, and Facebook controlled the internet, and the elites had decided that Zuckerberg could no longer be trusted to act in their party’s interest. Shortly after concluding his tour, Zuckerberg became mired in an onslaught of accusations by politicians and media outlets that the Russian government, among others, had used Facebook to influence the outcome of the presidential elections, destroying the popularity he had previously enjoyed. The following year, The Guardian and The New York Times broke a story about Facebook allowing a third party, Cambridge Analytica, to collect data about its users without their consent.

These scandals, along with Twitter’s prominent role in the presidential election campaign, inaugurated the tech backlash, and the deliberate seeding of public distrust of tech more broadly. The elite’s greatest fear was not misinformation, foreign interference, or “toxic” social media, as they proclaimed, but a rising wealth class with a competing vision for the world. This fear was compounded by prior failed attempts to gain surveillance access to tech companies’ data in the years leading up to the backlash. If they couldn’t assume control of tech through legal due process, they’d have to take it by force.

Those in tech were caught wholly off-guard by the turn in public sentiment. Until then, tech had enjoyed an extremely favorable relationship with the government, academia, and media. In an interview with The Verge two days after the November 2016 election, Zuckerberg confidently stated that, “Personally, I think the idea that fake news on Facebook … influenced the election in any way—I think is a pretty crazy idea.” To make such a statement in the wake of the election suggests that Zuckerberg had expected to be treated the way Facebook had always been treated: as a media darling. When that didn’t happen, Zuckerberg and many other tech executives got into a defensive position, concerned solely with fending off the blows.

Tech was at a crossroads. On one side were those who believed the media narrative that tech had caused a lot of problems in the world, and felt remorseful and ashamed of their work. On the other were those who maintained that tech and its values were uniquely positioned to improve the world, and refused to apologize. At best, they felt misunderstood; at worst, they saw the backlash as an attack from outsiders who didn’t understand how tech worked. This latter group formed the beginnings of the counterelite.

Mindful of the public flaying that Zuckerberg has received, members of the counterelite have avoided becoming collateral damage by rejecting mainstream media coverage. Brian Armstrong, for instance, who co-founded Coinbase, has loudly advocated for “every tech company [to] go direct[ly] to their audience, and become a media company,” once even using the publishing platform Medium to preempt an anticipated New York Times hit piece about Coinbase. Zuckerberg himself has now emulated this strategy, refusing to grant an interview to any mainstream media outlet after announcing that Facebook would be renamed Meta, instead sitting down with independent creators like Ben Thompson, who writes the business newsletter Stratechery.

The elite’s greatest fear was not misinformation, foreign interference, or ‘toxic’ social media, but a rising wealth class with a competing vision for the world.

Unlike previous generations, the counterelite isn’t rushing to start charitable (tax-advantaged) foundations in their name or make large donations to universities. Because the counterelite views individuals, not institutions, as the primary agent of change, they are more concerned with circumventing institutions than building them. Yet this individualist mindset will only take the counterelite so far if in fact they want to be public stewards rather than ambassadors of yet another industry town, like entertainment in Los Angeles, politics in Washington, D.C., or academia in Boston.

Tech is still afraid of the nuance and compromises that are required to interact with the outside world, and given how they’ve been mischaracterized by press and politicians, that fear is not unjustified. But this is a rite of passage which every wealth generation must navigate. The Davos elite were not immune to public criticism in their heyday, either. They, too, went through the hazing ritual of a public fallout in response to the 2008 bank bailouts and excessive displays of wealth, leading to the Occupy Wall Street movement several years later.

The Davos cohort eventually learned how to embed itself within every cultural sector. The counterelite, by contrast—who cannot muster the courage to call themselves elites—remains reluctant to don a suit and emerge from their reclusive hiding place behind a screen.

At the start of the pandemic, Andreessen published a manifesto, “It’s Time to Build,” on his venture capital firm’s blog. A critique of the institutional response to COVID-19, the essay urged tech to build the world they wanted to see. Yet some of the shortcomings he cites, such as the lack of a COVID-19 vaccine, were not due to a lack of building, as we now know. And the problem, it has become clear, wasn’t only an inability to build new things, but the refusal to get one’s hands dirty defending the viable heritage of the past. “Tech people didn’t participate in government,” Mike Solana, who writes Pirate Wires, the technology newsletter, once said in an interview. “They abdicated that responsibility and in its place came horrific policy that crippled the entire region.”

For the counterelite to live up to its own loftiest visions of individualism, progress, and the unfettered pursuit of opportunity, they will need to be judged by what they build that is of lasting benefit—not just for themselves, but for the entire country.

Nadia Asparouhova (@nayafia) is a writer and researcher examining the tech industry’s growing social and political influence. She is the author of Working in Public: The Making and Maintenance of Open Source Software (Stripe Press).

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