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(Bloomberg) — Listen and follow The Big Take on Apple Podcasts, Spotify or wherever you get your podcasts. 

Republican presidential nominee Donald Trump’s pick of Senator JD Vance as his running mate has many in Silicon Valley rejoicing — they see the former venture capitalist as one of their own. With Elon Musk’s commitment of $45 million a month to a super-PAC supporting the Trump campaign, it’s the latest sign of Silicon Valley elites embracing the MAGA movement.

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But the tech world hasn’t always embraced Trump. On today’s Big Take podcast, Bloomberg Businessweek columnist Max Chafkin joins host David Gura to talk about how we got here and what their support could mean for another Trump term.

Here is a lightly edited transcript of the conversation:

David Gura: When Donald Trump announced JD Vance as his running mate on Monday, some of the most prominent people in Silicon Valley rejoiced.

Chamath Palihapitiya, the CEO of Social Capital and a former Facebook exec, posted on X. “A Bestie adjacent as the VP?!?!?!” 

From Delian Asparouhov, a well-known venture capitalist: “WE HAVE A FORMER TECH VC IN THE WHITE HOUSE. GREATEST COUNTRY ON EARTH BABY.” 

There’s been some reporting that Elon Musk himself lobbied Trump to choose Vance as his VP. 

And just a few hours later, news broke of Musk’s commitment to donating $45 million a month to a Trump super-PAC led by Silicon Valley alums. 

The next day, Musk tweeted, “As a reminder, Doug Leone of Sequoia Capital publicly voiced his support for Trump 6 weeks ago. Silicon Valley has shifted.”

It’s an eye-popping series of developments for anyone who remembers when Elon Musk made his Iron Man cameo, and was seen as the manifestation of Obama era hopes that Silicon Valley innovation could make climate goals a reality.

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Archival Elon Musk:   I’ve got an idea for an electric jet.

Archival Robert Downey Jr.: You do? We’ll make it work.

Gura: Today, Musk and many of his former PayPal co-founders and other longtime tech leaders have lined up behind Trump. One of them, David Sacks, was even a keynote speaker at the Republican National Convention this week.

Archival David Sacks: My friends, we need President Donald J. Trump back in the White House…

Gura: So how did we get here? What does the sudden infusion of Silicon Valley capital to the Trump campaign mean for the 2024 election? And what might the storied crew of savvy investors expect in return if Trump gets a second term?

This is the Big Take, from Bloomberg News. I’m David Gura.

Max Chafkin:  The stereotype that Silicon Valley is liberal is just, it’s wrong. 

Gura: Max Chafkin covers Silicon Valley and its intersections with politics for Bloomberg Businessweek. He also wrote the book on a legendary Silicon Valley figure, The Contrarian: Peter Thiel and Silicon Valley’s Pursuit of Power.

Chafkin:  This is an industry that was founded as defense contractors. Like when you think about like, where Silicon Valley comes from, it comes from tech companies doing business with the military. That’s the root of the industry. 

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I think what has changed is that Silicon Valley historically was pretty libertarian. You know, low taxes, limited government intervention, immigration because, the industry has been and will probably continue to be dependent on immigrant labor, to some extent, and many founders come from, from different countries. These are all kind of like basic libertarian values that both parties, Democrat and Republican, have competed for over the years.

Gura: Yeah, Max, I remember in 2008, 2009, there was, I think, a warm relationship between Silicon Valley, and a Democratic president, Barack Obama. He even jokingly said he might think of moving to Silicon Valley and becoming a VC as a logical next career step for him when he left the White House. Just remind us what those days were like and sort of the, what the political terrain looked like in Silicon Valley then. 

Chafkin:  So venture capitalists, their thing is, is like, it’s not a data business even though they’ve invested a lot of like data driven companies. It’s a vibes business. It’s, it’s like getting a feeling and, and making a gut decision. And they saw a vibe shift in 2008. They saw the way that Barack Obama was able to marshal these giant crowds and generate a lot of youthful enthusiasm. And also Obama was pretty enthusiastic about Silicon Valley. He saw, you know, the new economy and tech as a way to help the nation’s economy grow. 

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And he was very vocal about that. Obama was very supportive of Elon Musk, gave this big loan to Tesla that helped save it, in the wake of the economic crisis, very big on electric cars, very big on alternative energy.

And Elon Musk being essentially the savvy operator that he is, embraced that part of his identity and his company’s identity. He really framed Tesla during those years as an environmentalist project.

Gura: During the 2016 election, many of these tech leaders did not endorse Trump. In fact, about 140 industry executives published an open letter denouncing him. One notable exception was Peter Thiel.

Chafkin:  Co-founder of PayPal. Co-founder of Palantir and more importantly, a really big deal venture capitalist. His main firm is called Founders Fund. He’s also invested in many other venture capital firms and really what’s most important about Peter Thiel is that he has this network of kind of like minded technologists, many of whom are very wealthy, many of whom are very powerful. It’s called the PayPal Mafia.

Gura: It’s a name that’s kind of shrouded in some mystery here, Max. PayPal Mafia. What is it and who’s in it? 

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Chafkin:  It refers to the early employees and founders of PayPal, who, you know, got together in the late 90s, took PayPal public, sold it to eBay, got very rich, and then used that money essentially to make other investments. And so it’s a group that includes Elon Musk, who was effectively a co-founder of PayPal. Max Levchin, who runs a company called Affirm, David Sacks, who was at the Republican Convention, has become a  major donor, Reid Hoffman, founder of LinkedIn, who’s a big, Democratic donor. Founders of YouTube, Yelp. You know, it goes on and on.  

Many of them have stayed in touch. They invest in each other’s companies. They help one another. It’s not just a business network, it’s a political network. In addition to helping one another’s companies, advancing a vision of politics as well.

Gura: During the 2016 campaign, Peter Thiel made waves by endorsing Donald Trump.

Chafkin:  First of all, it was shocking because very few business people, not just Silicon Valley people, were enthusiastic about Trump. 

But also because like Trump’s whole thing seemed 180 degrees from the stereotype of Silicon Valley, even the stereotype of like Silicon Valley conservatism, like we’re talking about a proud Luddite, a guy who doesn’t use email, we’re talking about a guy who wants to, have like extreme crackdown on immigration and Peter Thiel, like many very successful people in Silicon Valley, is an immigrant. It just goes on and on, right? He seemed like the very opposite of everything that somebody like Peter Thiel stood for.

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And even Thiel had talked about that. He’d said like Donald Trump, I’m paraphrasing, is like a symptom of everything that’s wrong with New York City.

On the other hand, when you sort of look a little deeper, Donald Trump, despite being kind of an odd fit, in terms of his character, sort of an awkward match with many of these technologists, they actually fit in sort of well together.

And the reason for that, I’d say, is, so, so Thiel, over the course of his career, his whole thing had been this idea that we as a society had stagnated. 

It was this idea that big business and government have sort of slowed down and startups, these Silicon Valley companies are the thing that’s going to bring us back to that crazy sci-fi future that we once imagined. That was the future of Peter Thiel’s boyhood, right? 

But it’s also just kind of another formulation for MAGA.  It’s a backward looking idea. It’s an idea of nostalgia.  It is in a weird way, kind of like a Silicon Valley version of what Donald Trump was saying. Donald Trump was saying, we need to get back to the future. We need to make America great again. 

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Gura: You could hear that sentiment during Thiel’s speech at the 2016 Republican National Convention.

Archival Peter Thiel-RNC: When Donald Trump asks us to make America great again, he’s not suggesting a return to the past. He’s running to lead us back to that bright future.

Gura: October 2016. A critical moment for the Trump campaign — the Access Hollywood tape is released.

Chafkin:  At that time, like, every Republican was sort of running away from him, and like, that’s when Peter Thiel chose to donate to Donald Trump.

He gave a million dollars to a Donald Trump political action committee, and he gave this speech where he kind of explained himself, and the explanation was like, ‘I don’t agree with what Donald Trump said. I’m offended by them, but he’s the guy.’ And, and Thiel had this very memorable line, you know, ‘you shouldn’t take Trump literally, you should take him seriously.’ 

Implication being like, he may be a little different from what you and I want, but he’s the guy we need. And like that became the kind of default Thiel position. And I’d say like a position that was sort of adopted by many in the corporate world after Trump got elected and they had to work with him.

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Gura: Trump is elected and there is this meeting that takes place at Trump Tower. In Manhattan. All these tech executives come, just set the scene for us. What do they talk about at that meeting and, and what does it say to you about the relationship that Donald Trump had with big tech?

Chafkin:  So Thiel, after the election was named a prominent position on the transition committee. December 14th, 2016, there’s this meeting on the 25th floor of Trump Tower.

Just to set the stage, glass all around, this big boardroom table, and you have basically, a who’s who of Silicon Valley seated with Trump in the middle.

You got Trump, Mike Pence is on his right side, Peter Thiel’s on his left side, and then going around, it’s all the biggies.

Archival Wall Street Journal: Elon Musk, the CEO of SpaceX and Tesla. I’m Eric Schmidt, Alphabet Google. I’m Safra Katz. I’m CEO of Oracle…

Chafkin:  Tim Cook on the other side of the table, Larry Page, Jeff Bezos. Eric Trump, Don Jr. So it’s like, Silicon Valley has made it to the inner sanctum. Once the cameras are gone, they just snapped into business mode. 

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You know, they were lobbying, they got right down to business and that’s essentially the story of the first Trump presidency. 

Trump didn’t follow through with many of these incredibly,  aggressive proposals. You know, there was a trade war with China, but Apple won a lot of exemptions.

Trump talked, ad nauseam, about how terrible Facebook was and how social media, you need to crack down on social media, but there were all these events at the White House with various, like, fake news, far right bloggers and so on. But nothing actually happened. The stocks of these companies did very well. Trump essentially left these guys alone. 

Gura: So by the end of Trump’s first term, he had a pretty favorable relationship with big tech. But then came January 6th. Trump was kicked off Twitter and Facebook. That’s coming up.

Gura: January 6th initially seemed like it would make Trump toxic even to the business-minded execs in Silicon Valley. But as Bloomberg Businessweek reporter Chafkin says — Silicon Valley is more often about vibes. And soon, the vibes were back in Trump’s favor.

And so what happened is, I think, first the Republican party, sort of figured out that Donald Trump was still very popular and that voters were going to be willing to look past January 6th. 

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Thiel also kind of, he never totally distanced himself from Trump, but he sort of went quiet, after the 2020 election, and he started getting active again during the midterm. 

And these MAGA Republicans did not necessarily have a great general election. Some of them lost. But it was clear that the Republican party was Donald Trump’s party. And I think from the midterm to today, the sort of comfort with Trump has grown. 

Gura: If you look at the list of people who are supporting Donald Trump this time around from Silicon Valley, is there a common thread of grievances that they have with this current administration with President Biden? 

Chafkin: There’s sort of two buckets of grievance with the Biden administration that you hear from Silicon Valley. One bucket is policy. Many of these guys are investors on this list. Many of these guys made enormous investments in various crypto companies and the Biden administration cracked down on crypto to some extent. 

There’ve been a bunch of criminal prosecutions of some really prominent crypto figures and also lots and lots of civil actions. As many people in crypto see it, the Biden administration has essentially, You know, gone to war against crypto.

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A second bucket, antitrust. Because of this kind of slightly more aggressive pose of the FTC, the M&A market has really cooled off because these big tech companies don’t feel like they can do, you know, big acquisitions as easily because there’s always a risk of antitrust. And so like that has really disrupted the business of many of these venture capitalists. 

And so, the industry thinks that Biden has been too hard on them. And that’s a policy thing, but there’s sort of a related thing, which is like character and manner and like how Biden talks about the industry. He has not been as solicitous of these guys.

There’s a sense that they do not have a president who is accommodating them.

Gura: Trump certainly represents a more accommodating President. But they also seem to think they’d have an accommodating vice president. Somebody who could pick up the Republican party mantle in a post-Trump world. 

Gura: I want to ask you about JD Vance, the junior senator from Ohio, now Donald Trump’s running mate. What familiarity does he have with a lot of these people?

Chafkin: He met Thiel at a, you know, law school event, while he was at Yale, and then he writes this book, Hillbilly Elegy, which is, you know, a super successful memoir that really struck a nerve, especially it was published in 2016, kind of became a sort of way to understand what was happening with the rise of Trump.

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Thiel blurbed the book and Thiel hired JD Vance at Mithril, which is one of his other venture capital firms. His time at Mithril was very short. This is not somebody who had a long distinguished career in tech before he went into politics.

And then the political story really intensifies in 2021 after Trump lost reelection after January 6th, Thiel takes JD Vance to Mar a Lago to essentially introduce him and, and also help kind of repair some of the damage because JD Vance, when he was promoting hillbilly elegy was super down on Donald Trump. He presented himself not as a Enthusiastic supporter of Trumpism, but kind of as an explainer of Trumpism and a critic of Trumpism.

And then most importantly, Thiel gives him a huge chunk of change to get his, um, primary candidacy off the ground. I think without the 15 million that Thiel puts into JD Vance’s, um, uh, campaign, You know, we don’t have JD Vance, the senator, we don’t have JD Vance the vice presidential candidate.

Gura: Thiel’s donation to JD Vance, Elon Musk’s eye-popping pledge of $45 million a month to a Trump super PAC — and now, the Republican ticket, with Trump and Vance. It all raises a question. 

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Gura: Max, there’s something kind of inherently transactional, I think, not to be too cynical about political donations, but, you know, if you’re, if you’re ponying up 45 million a month, one would think that you’d want something in return. 

What do these leaders in Silicon Valley expect to get or want to get from Donald Trump if he’s reelected?

Chafkin: They want to be left alone for the most part. Palantir during the Trump years did exceedingly well, got lots and lots of contracts.

The government would deny it, that, that there was any reason other than merit for Palantir to get those contracts. But there were a handful of companies that were less well politically regarded that did not get contracts. And Elon Musk is, in addition to an electric car executive, a defense contractor. 

There are a lot of economists right now in 2024 writing about how terrible Trump’s various proposals would be. We saw, you know, earlier this week, the stock market dived because Trump made some comments to Bloomberg Businessweek, um, and, you know, and it has implications for chip companies or whatever.

But I think what a lot of these CEOs know, and the Trump supporters know, or at least think they know, is that Trump didn’t follow through with many incredibly aggressive proposals. Trump essentially left these guys alone.

When you look at who is supporting Trump this time, they see a president who is fairly hands off on tech and, and that’s kind of like what they’re hoping for again. They don’t take the rhetoric literally, you know, just as Thiel suggested.

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