Silicon Valley’s Saudi money crisis illustrates a decline of ‘moral leadership’ in America | Industry
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Some of Silicon Valley’s biggest companies are swimming in billions of dollars invested by the crown prince of Saudi Arabia, Mohammad bin Salman — a heavy financial backer of SoftBank’s Vision Fund who is now accused of ordering the torture and assassination of journalist Jamal Khashoggi.
“Anywhere you tug, at any company or any investment firm or any VC, there is either Saudi money or there’s questionable money everywhere, across the system,” Recode’sKara Swisher said on the latest episode of Pivot. “And if you remove the Saudis from the worldwide global network, everything collapses.”
Her co-host, NYU’s Scott Galloway, said the silence of most tech leaders — and, even more importantly, the slow and muddled response from Washington — are indicative of a crisis in morality that will bite businesses in the end.
“We have put a price on moral leadership,” Galloway said. “And the presidents of the past have always tried to figure out the balance between the realpolitik and our strategic interest. This isn’t new. But we at least pretended to care … And by the way, I think this is the same infection that has caused illness across all of Big Tech: We’re trading off long-term moral leadership in exchange for short-term profits.
“The reason why we have inflows of capital, the reason why our publicly traded stocks traded at 19 times PE, not 11 or 12 in other markets, is because we have rule of law and some sense of moral leadership here,” he added. “And when we engage or traffic in bone saws, we are long-term trading off our brand and the margin power that comes from our brand. So this is not only the wrong thing to do, it’s economically a stupid thing to do.”