Moral dilemma: Big Tech’s Saudi benefactors
America’s tech industry has a Saudi Arabia problem, said Anand Giridharadas in The New York Times. The kingdom’s Crown Prince Mohammed bin Salman “has shifted Saudi Arabia’s investment attention from Wall Street to Silicon Valley.” The country has pumped money into the tech sector’s biggest emerging giants, such as Uber and WeWork, as well as newer startups that touch everything from food delivery to dog walking. The Saudi Public Investment Fund, its main investment vehicle, has put $45 billion into a technology fund run by Japan’s SoftBank, and reportedly plans to invest $45 billion more. Now the apparent state-sponsored murder of Saudi dissident journalist Jamal Khashoggi, most likely tortured and dismembered inside a Saudi consulate in Turkey, is testing Silicon Valley’s “willingness to go along with a Saudi narrative.” Saudi Arabia is “a medieval theocracy that still beheads by sword, doubling as a modern nation with malls.” Tech companies already face enough criticism. Do they really want to add to it by “becoming a reputation-laundering machine for one of the least admirable regimes on earth?”
The sheer amount of money offered by Saudi Arabia “is unprecedented and, to some founders, irresistible,” said Eliot Brown and Greg Bensinger in The Wall Street Journal. In addition to SoftBank’s Vision Fund, Saudi Arabia has poured billions of dollars directly into tech firms, and “the kingdom is now the largest single funding source for U.S. startups.” Given the idealistic missions espoused by many Silicon Valley leaders—WeWork, for example, “has banned meat over concerns about its environmental impact”—this relationship with a repeat human rights abuser is getting awkward. When we contacted 22 startups in which the Vision Fund or Saudi Arabia has invested, all but one declined to comment or didn’t respond to requests. Uber, the one exception, noted simply that its CEO, Dara Khosrowshahi, had withdrawn from a Saudi-sponsored business conference being held in Riyadh this week.
But splitting with Saudi Arabia is “easier said than done,” said Owen Thomas in the San Francisco Chronicle. Uber has boycotted the Riyadh meeting, but the Saudi royal family still owns 14 percent of the ride-hailing firm, both directly and through the SoftBank fund. If Uber goes public next year at a $120 billion valuation, as bankers have proposed, that share would be worth $16.7 billion. “There’s no chance the Saudis would want to sell at anything below that price.” Silicon Valley firms want cash to stay afloat, said Scott Galloway in Recode.net. But they’re “trading off long-term moral leadership in exchange for short-term profits.” Doing business with tyrants is not only morally “the wrong thing to do, it’s economically a stupid thing to do.” ■