Uber IPO writes reveals the extent of Saudi ties in Silicon Valley



Silicon Valley's relationship with an undemocratic regime that has a troubling human rights record is in the limelight.

President Donald Trump has spoken about it. Lawmakers are debating ways to stop the flow of money and data between the two.

The opponent of this cross – border tragedy is China, which has sounded the alarm in the United States by strengthening its local technology industry and sparking suspicion of spying and influence.

However, the intimate links between another repressive foreign power and Silicon Valley are far less problematic.

Saudi Arabia's presence in Silicon Valley is more important than ever.

This became particularly clear Thursday when Uber filed its documents relating to IPOs. Depot S-1 told us that the kingdom's public investment fund held 5.2% of the carpool company.

This figure may actually underestimate the influence of Saudi Arabia within Uber. Softbank, the Japanese technology conglomerate, holds a 16.3% stake in Uber through its Softbank Vision fund. Saudi Arabia is the largest investor in the Vision Fund, which contributed $ 45 billion to the $ 100 billion of the fund's bankroll.

Saudi Crown Prince Mohammed bin Salman and Softbank's son Masayoshi
Reuters

King Vision is now the undisputed king of Silicon Valley. He makes big checks and accumulates holdings in high-flying startups like WeWork, Slack, DoorDash and GM Cruise. This means that Saudi funds largely fund Silicon Valley's innovation.

As the New York Times pointed out in October, this use of Saudi money is an embarrassing truth for an industry that is proud to make the world a better place.

From space to augmented reality, Saudi money is everywhere

Some basic facts about Saudi Arabia: According to Amnesty International, it is a place where torture and arbitrary arrests are widespread. a place where women are not allowed to travel abroad without the permission of a male "guardian". It is the leader of a coalition responsible for air strikes in Yemen responsible for thousands of civilian deaths and injuries.

And then there is the horrific assassination of Saudi dissident journalist Jamal Khashogghi, who, according to the initial CIA finding, was ordered by Saudi Crown Prince Mohammed Bin Salman, reported the Wall Street Journal.

In other words, Saudi Arabia is the antithesis of everything the altruistic mission statements of technology companies claim to represent.

Saudi money may be more prevalent in technology, but it is not new. Prince Alwaleed bin Talal was one of the first investors on Twitter and, at one point, held a larger stake than his co-founder Jack Dorsey. (Alwaleed himself was detained – in a Ritz Cartlon hotel – for three months in 2017 by his cousin Prince Mohammed, the current head of the country).

And the Saudi Public Investment Fund is also a shareholder of Magic Leap, Tesla and Virgin Galactic, according to research firm CB Insights. Whether you are in augmented reality or space, you can not escape the Saudi money.

An article in Quartz's 2018 article quotes Quid's research firm's estimate that Saudi investors have directly participated in series of investments in technologies totaling at least $ 6.2 billion. in the previous five years.

Uber CEO Dara Khosrowshahi
Fortune

Dara Khosrowshahi, CEO of Uber, has dropped a conference hosted by Prince Mohammed last year after the murder of Khashogghi, like Diane Greene, former CEO of Google Cloud. But in most cases, tech start-ups have not reacted much to the acceptance of Saudi money or Softbank.

The change wind of Uber

So why does Silicon Valley accept Saudi money?

It is true that we live in a world where oil is flowing. It is difficult to define a moral line when you inject gas in your car every day.

Maybe the technology industry thinks that brings the wind of change.

After all, when Uber announced its investment in Saudi Arabia in 2016, women were not allowed to drive.

"Of course, we think women should be allowed to drive," said Jill Hazelbaker, of Uber, at the New York Times at the time. "In the absence of this, we have been able to provide extraordinary mobility that did not exist before – and we are extremely proud of it."

And two years later, a change occurred when the ban on driving women was officially lifted.

Has the presence of Uber in Saudi Arabia caused the change? It's impossible to say for sure, but I would not bet.

It is much more likely that Prince Mohammed, looking for a way to hone his skills as a "reformer" when he came to power in 2017, felt that the controversial driving ban was an easy and timely way to to free oneself in exchange for goodwill.

The idea of ​​working from the inside to make changes to a long and mediocre experience in technology. Remember that Google is twisting in a pretzel to justify the introduction and then the withdrawal of a search engine in China. When Google's secret project to create a new censored search app for China provoked deep indignation, the company did not even try to justify itself by invoking the "change from within".

Technology companies do not really want a revolution

You may be wondering why more and more companies are not taking a stand and are refusing Saudi money.

The sad reality is that companies are more interested in maintaining the status quo on which their activities are built than in change. even "disruptive" technology companies.

This is particularly true today, as high tech companies are besieged from all sides, accused of disrupting our privacy, our elections and the attention of children.

US President Donald Trump (C) and other leaders react to the arrival of a wall of computer screens while they visit the World Center for Wrestling. against extremist ideology in Riyadh, Saudi Arabia
Reuters / Jonathan Ernst

Thinking differently is an excellent copy marketing when he sells gadgets. But there are few benefits to running a revolution if it scares customers.

Look no further than the Google App Store. Through an app called Absher, Saudi men can indicate where women travel and receive alerts when women use a passport to leave Saudi Arabia. After Bill Bostock's investigation of Insider on this app, US lawmakers demanded that Google remove Absher from its app store.

Google refused to pull the application. He argued that the application did not violate his terms of service.

At present, the service conditions of the technology industry are clear. Whether it is policies, products or investors, the rule of thumb is stability.


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