×

Silicon Valley under attack both from within and without

  • Google CEO Sundar PIchai cancelled a meeting he'd cancelled a vacation for under pressure from conservative pundits, who published the names of employees online
  • Other moves by Silicon Valley power brokers this week point to an industry under attack from within, as well as without
  • As tech industry's profile has risen in Washington and across the U.S., divisive culture wars now mix with corporate backbiting
Sundar Pichai
Asa Mathat for Vox Media
Sundar Pichai

This was not the week off that Silicon Valley had planned.

Google CEO Sundar Pichai now leads a workforce divided by the issue of diversity, according to an email he sent to employees cancelling an all-hands meeting on the topic.

"The vast majority of you are very supportive of our decision. A smaller percentage of you wish we would do more. And some are worried that you cannot speak out at work freely," Pichai wrote.

Even that spin sounds optimistic in light of a report that said just over half the company's employees who responded to a survey on an online message board disagreed with Pichai's decision to fire engineer James Damore.

Damore wrote a controversial memo that began with criticism of the company's diversity programs but then veered into sexist remarks that prompted Pichai to send him packing after 3 1/2 years of service.

Pichai cancelled his vacation to call an all-hands meeting to discuss the firing, then cancelled the meeting over concerns that some Google employees, who'd been publicly identified by conservative commentators online, would be abused.

In other words, Pichai retreated -- often not an effective long-term strategy to counter aggression. Some on the right are now calling for "marches" on the company's offices.

And he's far from the only technology industry leader facing a fierce attack.

Two other surprising moves by tech power brokers this week point to an industry that is increasingly at war with itself, as well as external forces.

The first were comments made by venture capitalist Roger McNamee, to CNBC and others, that he regretted being among the early investors in both Google and Facebook, which in his view have become addictive threats to society.

Days later, one of the best-known venture firms in the world, which has made tens of billions dollars investing in young tech firms, sued someone who until recently had run of their most-successful startups.

The lawsuit filed against Uber founder, former CEO and board member Travis Kalanick by Benchmark is arguably unprecedented, as far as pivots go.

Filed by VCs who were among his earliest backers and staunchest defenders through management crises under his leadership, it accuses Kalanick of fraud.

Specifically, it charges that he made fraudulent statements last summer, when he engineered three additional seats be added to the company's board -- one of which he still holds.

"Kalanick intentionally concealed and failed to disclose his gross mismanagement and other misconduct," says the suit.

Ouch.

Given that Benchmark owns 13 percent of Uber and Kalanick 10 percent, respectively -- stakes worth many billions of dollars based on the company's valuation -- it's a suit that could make many attorneys very rich.

All of this antagonism comes as the profile of the technology industry has grown commensurate with size and market value of its marquee companies.

As of midday trading Friday, Apple, Microsoft, Alphabet, Facebook and Amazon were worth a combined $2.96 trillion (with a "t".)

That kind of size tends to draw attention.

Facebook late last year was blamed for no less than handing the election to President Donald Trump, an accusation so large that it's since sent Mark Zuckerberg around the U.S. to find out what really happened.

One thing that has happened, as events this week have shown, is that this largely west coast-based industry, which once prided itself on remaining aloof from the rest of America -- and disengaged from Washington politics -- now finds itself part of a nation often at war with itself.

"America is an experiment," Defense Secretary James Mattis said this week.

Mattis made the comments alongside others predicting a greater role in America's defense for companies like Amazon and Google.

Their leaders may want to be careful what they wish for.

As many in Silicon Valley begin to pack their most outlandish clothes into their futuristic vehicles and head to the bohemian survivalist escape into the Nevada desert known as Burning Man, they should know one thing.

America will be waiting for them when they get back.

WATCH: Friction between the White House and Silicon Valley