Just as companies like Facebook this year have begun to grapple with their corporate responsibility, Silicon Valley investors this week began to confront what could be called their geopolitical responsibility.
The proximate cause: The alleged murder of Saudi dissident and journalist Jamal Khashoggi on orders from Saudi Arabia leaders, in an event that could put an end to the budding love affair between the Saudi money machine and the Silicon Valley titans who welcomed it with open arms just six months ago.
So, on Thursday, a few Silicon Valley celebrities came out to say that they were disappointed in the Saudi government: Steve Case, the former AOL chief executive, said he was putting his plans to attend this month’s glitzy Saudi finance conference — ‘Davos in the Desert’ — “on hold.” Sam Altman, the head of the influential Y Combinator incubator, said he would suspend his work advising the Saudis on their new “smart city” called NEON.
That’s all well and good. But if Silicon Valley’s conscience was as perturbed as it pretends to be, we’d see real changes to the financial ties that bind the world of startups and the world of Saudi Arabia.
That’s why the day’s most consequential news felt like Richard Branson’s proclamation that he would pause talks between his space businesses, Virgin, and the Saudi government for a possible $1 billion investment. But Branson went beyond that, and issued the day’s most full-throated condemnation of his peers.
“What has reportedly happened in Turkey around the disappearance of journalist Jamal Khashoggi, if proved true,” Branson said, “would clearly change the ability of any of us in the West to do business with the Saudi Government.”
That should perk up the ears of a few people. Here’s a partial list:
- Uber CEO Dara Khosrowshahi, whose board of directors includes a key Saudi leader, Yasir Al-Rumaayan, and whose company accepted $3.5 billion from the country’s sovereign wealth fund in 2016. Khosrowshahi said he would pull out of the Riyadh summit, but will Uber actually change any of its financial relationships with the Kingdom?
- Magic Leap and its CEO Rony Abovitz, who raised $400 million from the Saudis in April. Abrovitz said zilch Thursday about the Khashoggi incident.
- Marc Andreessen and the entire venture capital industry he represents. The high-profile Andreessen is on the same advisory board as Altman, but he so far hasn’t commented on his involvement in NEON. The same goes for Masayoshi Son, the SoftBank CEO who has struck a financial alliance with the Saudi business emissary, Mohammad bin Salman, through the SoftBank Vision Fund.
Andreessen and Son have few peers in the venture capital industry today who are speaking out publicly with their opinions on the Saudis. Investors around town will privately admit that the foreign backing of U.S. startups is hypothetically a problem, but few consider it a priority worth tackling today.
Why? Silicon Valley startups need money. The Saudis have hundreds of billions of dollars in oil money that they need to invest quickly.
Until those needs change, color me skeptical that the relationship will, too.