Silicon Valley's impossible balancing act with Trump

Tech firms take travel ban opposition to court
Tech firms take travel ban opposition to court



Shapiro, president and CEO of the influential Consumer Technology Association, says he wondered if some would feel "uncomfortable," given the tech industry's opposition to Trump.

"I didn't want to offend anyone," he says.

Shapiro, a Trump critic during the campaign, was one of the first to lay out how the tech industry could work with the new president. Yet, one month into Trump's presidency, that working relationship is increasingly rocky, thanks in large part to the controversial travel ban loathed by Silicon Valley.


silicon valley balance

The new "calculus" for some companies, according to Shapiro, boils down to: "Are you more concerned about what President Trump can do with a tweet, or are you more concerned with what your customers can do?"

Lately, the answer seems to be the latter.

The CEOs of Uber, Tesla (TSLA) and IBM (IBM) have each had to defend their role on Trump's business advisory council after facing criticism from customers and employees. Uber, in particular, faced a backlash that pushed CEO Travis Kalanick to drop out of the council.

"The Uber issue has sent most companies in the other direction. You get punished for not distancing yourself from this guy," says Bradley Tusk, a regulatory adviser who has worked with Uber and Tesla.

Friending Republicans


During the campaign, Trump said he would create "problems" at Amazon (AMZN) for allegedly being a "monopoly" and not paying enough taxes. He also pledged to block the mega-merger between AT&T (T) and Time Warner (TWX), CNN's parent company.


"There are lines of communication with the White House. They are still talking," says one lobbyist who works with the tech industry and spoke on the condition of anonymity. But much of the industry's public outreach will likely be directed at federal departments and Congress rather than the president, according to the lobbyist.

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Tech firms are beginning to turn to lobbyists with connections to Trump. The problem is that there aren't many because Trump himself is new to politics.


"You can't put your head in the sand and say, 'I just wish this didn't happen,'" Ballard tells CNNTech. "It's happened. It's real. And people are adapting to it."

But it's still unclear who exactly tech companies should be courting.

"If you're a company trying to hire Republicans, do you hire Trump Republicans, or [Paul] Ryan Republicans, or [Mike] Pence Republicans, or somebody else?" says one person who works with the big tech companies on government policy.

"I don't think most of us have figured out how to deal with it," the source adds. "From one week to another, it's not clear what's the best tactic."

Silicon Valley gets disrupted


Top execs from Apple (AAPL), Amazon (AMZN), Facebook (FB), Alphabet (GOOGL) and other tech companies met with Trump in December.


trump tech summit meeting


"It goes directly against all of the values of our ecosystem and our industry," Aaron Levie, CEO and cofounder of Box, told CNNTech after joining the court fight. "The industry got caught off guard."

The result, according to Levie, was a "more stressed relationship" between tech and Trump. "I think that we can have disagreements on specific policies while still being productive and collaborating with the overall administration," Levie says.

But, Levie added, that potential for a productive working relationship "does get reduced with the more unpredictability there is and the more chaos that emerges."


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During the Obama years, the tech industry took positions on political issues like net neutrality and the need for encryption. But Obama was a vocal advocate for tech innovation and has hinted at a desire to be a venture capitalist. The administration basically gave Silicon Valley "a pass," according to one lobbyist.

Some members of Obama's staff came from, or took jobs in, Silicon Valley. So tech companies could push back and still enjoy a strong relationship with the administration.

"Most of our companies have only known a President Obama during their life as a company," says Michael Beckerman, president and CEO of the Internet Association, a trade group that represents Facebook, Snapchat, Pinterest and others. "That's going to be an adjustment."


"No one is keeping score, but it is natural to notice who is supportive on key policies," says Charlie Black, a former lobbyist for Trump whose firm Prime Policy Group works with Google.

This may explain why the tech industry chose to speak out in unison against Trump's immigration order. As the source who works with tech companies on government policy put it, "You don't want to be an outlier in a world of Trump."


"It's going to be a long and bumpy four years," Tusk wrote in a memo to his tech clients this month. "Even if you are going to speak out, wait for the right moment."

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