Silicon Valley elites are now facing a serious dilemma: tech billionaires allied themselves with Donald Trump, only to inflict heavy costs on the Republican Party in the midterm elections, and now they must repair their relationship with the American public.
Some Democratic candidates ran directly on an anti-AI platform and captured control of both the Senate and the House in Tuesday's elections. In their victory speeches, Democrats issued sharp warnings that they intend to rein in the "AI billionaire class."
A host of tech giants had previously gone out of their way to court Trump and fund his personal projects, providing campaign money to the pro-Trump "Make America Great Again" (MAGA) camp in the hope that his administration would loosen regulation and allow the multi-trillion-dollar AI industry to expand without restraint. Now they are being forced to rethink their political strategy.
"This election was a rejection of the tech nouveaux riches who cozy up to Trump and try to block reasonable regulation," said Brad Carson, head of the U.S. group Responsible Innovation and a former Democratic congressman. He said the public backlash proves there is genuine opposition within American society to the overall direction of AI development.
The political action committee Tomorrow Together had previously run ads attacking Republicans for allowing AI to develop without order. On Wednesday the committee released a poster "thanking" venture capital titan and major MAGA donor Marc Andreessen and others, with the caption: "Last night's victory would not have been possible without you."
Republican campaign groups have received more than $600 million in cumulative tech donations; over the past year, allies on the White House side have also repeatedly suppressed plans by red states to pass AI safety bills and mocked residents protesting data center construction — Trump said these protesters wanted to "go backward and settle for poverty."
After the midterm defeat, Republican insiders said the party must respond quickly to public discontent. "Republicans should send these tech nouveaux riches back to Silicon Valley," said Brendan Steinhauser, a longtime Republican strategist and former Tea Party activist, in an interview. He argued the party should distance itself from Elon Musk, Nvidia CEO Jensen Huang, and Trump's chief AI adviser, venture capitalist David Sacks.
Amy Kremer, a MAGA activist who helped organize the pro-Trump rally on January 6, 2021, said Republicans "gambled their congressional majority on AI capital while ignoring their own party's voters." Far-right influencer Laura Loomer predicted that these tech giants who once backed Republicans will quickly switch to supporting the radical left, and reminded her followers that platforms such as Meta once banned Trump's accounts.
Republican lawmakers about to become the minority are also under pressure to work with Democrats to tighten AI regulation and avoid another severe setback in the 2028 election. Janet Kelly, a Virginia Republican and head of the conservative, pro-regulation group Alliance for a Better Future, told FT: "Voters' attitude is very clear — they want policymakers to listen more to the public on AI issues and they expect action soon."
The AI industry's troubles now go beyond negative public opinion. Democrats have said that after taking office in January next year, they will use their newly won power to subpoena tech executives to testify under oath before Congress and investigate companies such as Musk's that have business dealings with the federal government, while some lawmakers are pushing legislation to slow AI research and development. Arizona Democratic congressman Yassamin Ansari, who won re-election this week, said: "The Democrats' top agenda after taking office must include pausing frontier AI development and banning the development of superintelligent AI."
Musk is also facing strong constraints in Texas, where he has long invested heavily. He spent more than $200 million backing Republican candidates for senator and governor in the state, but for the first time in decades Texas elected Democrats to both positions. Governor-elect Gina Hinojosa has promised to halt approvals for new data centers, which could deal a heavy blow to Musk's plan to build a third giant supercomputer, "Colossus," near Brownsville. Musk is also building the world's largest chip factory, Terafab, in Grimes County.
After the midterm elections, the combined market value of SpaceX and Tesla evaporated by $420 billion. Some tech billionaires had already scaled back their support for Trump-backed candidates late in the campaign. OpenAI co-founder Greg Brockman and his wife had donated $25 million to the pro-AI political action committee Leading the Future; amid internal opposition at the lab, he told employees he would not fulfill a pledge to donate another $25 million.
Companies such as Palantir and Meta rushed to hire Washington lobbyists with close Democratic ties before a Democratic victory was finalized. OpenAI hired Jessica Schumer, daughter of Senate Minority Leader Chuck Schumer.
After the election, AI companies tried to reshape the narrative by packaging data centers as "compute parks" and promising benefits such as accompanying schools, power investment, and environmental concessions to win over local residents. But pro-regulation activists warned that these remedial moves, as well as statements by companies such as OpenAI and Meta that they accept more regulation, came too late; a Congress wary of AI will view them with suspicion.
"I don't think they realize yet that any bill, proposal, or policy idea they put forward is tagged as negative from the start, and the root cause is their past political alignment," said Shaunna Thomas, head of the advocacy group Guardrails Alliance, whose funders include employees of leading AI labs. "They underestimated how negatively they are viewed inside Congress."
Some within the Democratic Party have already called on their party not to mend ties with AI labs. Greg Casar, a Texas Democratic congressman and head of the party's progressive caucus, said: "Voters rejected Republicans partly because the Republican Party was bought by AI billionaires. Democrats must hold them accountable, not accept their donations."
Tech companies are also worried about overcorrection. An executive at a large listed company said that in the next election cycle it would adopt a hedging strategy, anticipating that voters could also turn against Democrats in two years. "We will not underestimate the possibility that Democrats also suffer a public backlash and create opportunities for Republicans like DeSantis and Marco Rubio." A Meta executive revealed that shortly before the election, after Republican lobbyist Joel Kaplan, who oversees public affairs, announced his departure, Democrat Brian Rice gained more influence; but Kaplan's deputy, also a Republican, is staying on for now. "Our team has deep bench strength and diverse positions, and we have always spread our bets."
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