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The Almighty Buck Businesses United States News

Silicon Valley's Saudi Arabia Problem (nytimes.com) 297

An anonymous reader shares a report: Somewhere in the United States, someone is getting into an Uber en route to a WeWork co-working space. Their dog is with a walker whom they hired through the app Wag. They will eat a lunch delivered by DoorDash, while participating in several chat conversations on Slack. And, for all of it, they have an unlikely benefactor to thank: the Kingdom of Saudi Arabia. Long before the dissident Saudi journalist Jamal Khashoggi vanished, the kingdom has sought influence in the West -- perhaps intended, in part, to make us forget what it is. A medieval theocracy that still beheads by sword, doubling as a modern nation with malls (including a planned mall offering indoor skiing), Saudi Arabia has been called "an ISIS that made it." Remarkably, the country has avoided pariah status in the United States thanks to our thirst for oil, Riyadh's carefully cultivated ties with Washington, its big arms purchases, and the two countries' shared interest in counterterrorism. But lately the Saudis have been growing their circle of American enablers, pouring billions into Silicon Valley technology companies.

While an earlier generation of Saudi leaders, like Prince Alwaleed bin Talal, invested billions of dollars in blue-chip companies in the United States, the kingdom's new crown prince, Mohammed bin Salman, has shifted Saudi Arabia's investment attention from Wall Street to Silicon Valley. Saudi Arabia's Public Investment Fund has become one of Silicon Valley's biggest swinging checkbooks, working mostly through a $100 billion fund raised by SoftBank (a Japanese company), which has swashbuckled its way through the technology industry, often taking multibillion-dollar stakes in promising companies. The Public Investment Fund put $45 billion into SoftBank's first Vision Fund, and Bloomberg recently reported that the Saudi fund would invest another $45 billion into SoftBank's second Vision Fund. SoftBank, with the help of that Saudi money, is now said to be the largest shareholder in Uber. It has also put significant money into a long list of start-ups that includes Wag, DoorDash, WeWork, Plenty, Cruise, Katerra, Nvidia and Slack. As the world fills up car tanks with gas and climate change worsens, Saudi Arabia reaps enormous profits -- and some of that money shows up in the bank accounts of fast-growing companies that love to talk about "making the world a better place."

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Silicon Valley's Saudi Arabia Problem

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  • by DogDude ( 805747 ) on Sunday October 14, 2018 @12:08PM (#57476362)
    Problem solved.

    Next problem?
  • There's no "problem" (Score:5, Informative)

    by melted ( 227442 ) on Sunday October 14, 2018 @12:17PM (#57476412) Homepage

    If you've ever worked with Silicon Valley types you'd know most of them will sell their mom for a buck. Nobody gives a shit where their next round comes from as long as it does come.

  • Prediction (Score:5, Insightful)

    by 93 Escort Wagon ( 326346 ) on Sunday October 14, 2018 @12:22PM (#57476424)

    Lots of talk, followed by some back room dealing. A compromise will be reached whereas the US and Europe can take some token action that Saudi Arabia will make strident statements against and will make some token responding gesture - neither of which will substantively impact each other.

    The West is just too dependent on Saudi oil... plus they’re considered friendly to western interests. No one will have the will to really punish them.

    • Re:Prediction (Score:5, Insightful)

      by alvinrod ( 889928 ) on Sunday October 14, 2018 @12:38PM (#57476512)
      The U.S. doesn't need to be dependent on them at all for oil. We've easily got enough of our own to ride out the switch to electric vehicles. If you look at who we import oil from, we get way more of it from Canada than we do Saudi Arabia.

      The reality is that they buy a lot from us to support their military and they hate Iran with a passion, which suits our interests fine. They're a shitty ally, but no one wants to rock the boat too much as the Middle East is unstable enough as is without countries collapsing and another ISIS-like entity trying to seize power.
      • What you fail to realise is that oil is a global commodity. Sure, you import more of it from Canada, but the price you pay is the price Saudi Arabia sets.

      • The US has enough oil to avoid buying from nasty petrostates. But Europe and Asia don't.

  • take a look at how much influence the Saudis have bought in mainstream media outlets and academia. There's a reason the former will lie through their teeth about Israel even as Hamas claims armed combatants and live video shows armed terrorists with guns and high explosives, and latter is increasingly full of people who will openly violently attack jewish students just for existing while heaping praise on arab colonialism.

  • by Anonymous Coward on Sunday October 14, 2018 @12:35PM (#57476492)

    To get the Saddam treatment.

    SA always had the same laws as the IS. Yet they were America's best friend in the region.
    Because their leaders obeyed the USA.

    Who here remembers when Saddam was America's best friend aka henchman in the region?
    Suddenly he became "the new Hitler" literally over night. Only beause he stopped obeying, and attacked Quwait instead of Iran as he was told to, because he was tired of losing. That is literally all that changed. He already was an asshole before.

    And why did he keep losing? Because Iran had the third or fourth largest military in the world.
    And why was that?
    Because Iran got the same treament before!

    Does anyone remember, when *Iran* was the USA's best friend in the region? "As a stronghold against communism." (As if the Russian dictatorship wasn't a big enough enemy of communism themselves. Stretching out the "transition phase" ad infinitum.)
    Then, the Iranians suffered so much under their US puppet dictator, that they fell for religion, and in their desperation, chose a religious nutjob. Which would be like the USA having a literal revolution, to install the WBC, just to get rid of Trump.
    Bam, they were the new Hitlers.

    Why do you think with recently taking Russia out lf the convenieg enemy figure closet again, suddenly they try to get along with Iran again, just when a new US-friendly leader jumps out of nowhere.

    So now it's Saudi Arabia's turn. To be turned back into a desert wasteland.
    Did they get too cocky? Or is it simply that China bough the oil instead and became their new oil best buddies, and now that the USA got more oil-independent, the old SA shit does not fly anymore?

    Oh well... at least it will be the the USA's very first actual blow against terrorism.
    Which will come back to bite them, once the Russia scarecrow is all used up again, and they realize, that idiot TrumpObamaBush emptied the closet. ;)

    • Which will come back to bite them, once the Russia scarecrow is all used up again, and they realize, that idiot TrumpObamaBush emptied the closet. ;)

      Comrade, you've outdone yourself. Extra vodka serving tonight.

  • by Qbertino ( 265505 ) <moiraNO@SPAMmodparlor.com> on Sunday October 14, 2018 @12:38PM (#57476506)

    This isn't really news for those who pay attention.

    • "Isis == Saudi Arabia without oil"

      Not really. ISIS funded most of their operations by _selling oil_ from the lands they've controlled. Iran was buying some of it.

      • by vovin ( 12759 )

        ISIS is also heavily funded by Saudi Arabia in both cash and transfer of weapons, of which I fully expect a large percentage of the latest 100b deal to funneled to ISIS.

  • by 140Mandak262Jamuna ( 970587 ) on Sunday October 14, 2018 @12:52PM (#57476560) Journal
    Not because they invest in Silicon Valley. But because they are Saudi.

    They way jerked the rag under Elon Musk shows they are not to be trusted. Tell him, "I am the final authority, I approve, let us do the deal at 419$", Elon, "what about 420?". "OK deal". The idiot tweeting prematurely was probably not part of the plan, just an additional unexpected bonus.

    • Re: (Score:2, Informative)

      Jerked out the rag under Elon Musk? They bought 5% of Tesla at that point. They love Tesla and Elon. Apparently the feeling is mutual.
      • by Rei ( 128717 )

        Still own 5%. And just granted Tesla the right to run wholly foreign owned stores and service centres in the country. And there's supposed to be a huge cleantech announcement on the 18th that many (not including me) are speculating has to do with Tesla.

        Needless to say, this is now - not to put too fine a point on it - an uncomfortable situation for Tesla, and the numerous other Silicon Valley companies that find themselves in similar situations. It was always awkward to work with Saudi Arabia, but nobody

        • Re: (Score:2, Informative)

          Why uncomfortable? From what I understand Musk welcomes them and considered selling Tesla to them. What makes you think he is "uncomfortable" with them? Seems like best buddies to me.
    • by Megol ( 3135005 )

      I sure hope you are joking.

    • They way jerked the rag under Elon Musk shows they are not to be trusted.

      Wait, what? How, exactly, did they jerk the rug out from under Elon Musk?

  • by 110010001000 ( 697113 ) on Sunday October 14, 2018 @01:25PM (#57476680) Homepage Journal
    They are also a 5% owner of Tesla, and apparently Elon Musk has discussed further investment with them and also selling the company to them. I guess he likes those guys.
  • by rsilvergun ( 571051 ) on Sunday October 14, 2018 @02:07PM (#57476870)
    but is this gonna change how anyone votes? Donald Trump just said the quiet part out loud [fark.com]. He walked it back because it made him look weak, not because it was a morally reprehensible thing.

    This keeps happening too. Paul Ryan has repeatedly called to privatize Medicare for anyone under 55 (being careful not to risk votes of current seniors). Net Neutrality is dead. There's a serious challenge to the Affordable Care Acts protection of pre-existing conditions which I know many /.ers depend on (we're an aging demographic, so we got pre-existing issues alright). So far none of this has budged polls. There might be a bit of a shake up in the mid terms, but only because voters traditionally hand the other side the house just to balance things out. And even then those voters are voting for the more conservative candidates out of the other side, so it's all much the muchness.

    So is anyone going to drastically change who their vote for, or start voting consistently when they didn't bother in the past? Is this or anything else above enough to change voting behavior?
    • People wont' change much. They will vote against their own interests as long as they think their candidate is on their side. If their top concern is getting rid of abortion then they won't care if their candidate strips away other freedoms at the same time, and if their top concern is protecting their domestic job then they won't care if the economy suffers. The average voter doesn't like complexity and isn't thinking about complex trade-offs, so instead thinks in very simple terms such as "my guy versus

    • by vovin ( 12759 )

      Interesting question ... it there any reason to believe that HRC or anyone else in that seat would *do* any different? We know HRC was tight with Saudi and knew Saudi was sending the weapons the were buying (under here okay as US Sec Of State) to support ISIS in Syria. We know Obama was tight with Saudi, we know the Bushes were all best fiends with the Saudi and investment partners with the 'bin Laden' family.

      So what new crazy outsider do you image sitting the the hot seat will do it differently?

      IMO there i

  • Ignoring all the purple prose (what's the agenda there?), a thinking person really ought to come up short at the phrase "unlikely benefactor". Hard short.

    Perhaps I have a superior education, but I would have filed this under: I'll take extremely obvious things for 500, Alex. Consider: one of the largest nest eggs in human history recently celebrated their golden gooses 65th birthday party. Certainly not dead yet, but unmistakably slowing down. Early-bird dinner discounts. That kind of thing.

    Optimistically

  • Nobody really questions where investment money comes from but surely even a 5 year old can join the dots - which ethical groups have millions of dollars to chuck around on 1000/1 bets?
  • by hoofie ( 201045 ) <mickey@[ ]se.com ['mou' in gap]> on Sunday October 14, 2018 @10:21PM (#57478422)

    The article selection is rather poor and simplistic. The relationship between Western Governments and the Saudi's goes back now some 100 years to the founding of Saudi Arabia and is much, much more complex than described involving two world wars and the later discovery of oil.

    Saudi money, both from government and private sources, has been poured into Western Economies and businesses for decades. When I worked there in the early 90's, the owner of the business I worked for, a long-established import company, had his personal financial assets invested in the UK and the US and his children educated overseas. He understood that he only operated in business while he was on the right side of the ruling family and ensured that if it all went pear-shaped he would be financially secure in London for example. And he was just one of many, many businessmen who did the same thing.

/earth: file system full.

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