Photo: Bandar Algaloud/Saudi Kingdom Council

The grisly revelation of Jamal Khashoggi’s detention and death in the Saudi consulate in Istanbul has upended the longtime elite foreign-policy consensus around the U.S. alliance with Saudi Arabia. But it’s not just wonks and think tankers who suddenly find themselves unable to countenance their ties with the Saudis. Silicon Valley has long looked to the vast riches of the Saudi sovereign wealth fund for investment capital, and following outcry over Khashoggi’s death, Wall Street titans, tech executives, and their media cheerleaders said they would no longer attend the ongoing Future Investment Initiative conference in Riyadh. Twitter announced that it was banning accounts linked to Saudi propaganda efforts, and British mogul Richard Branson declared that if confirmed, Khashoggi’s murder “would clearly change the ability of any of us in the West to do business with the Saudi Government.”

But for all the hasty cancellations from the so-called “Davos in the Desert,” Silicon Valley is unlikely to totally cut the cord with Saudi Arabia. Despite the bold public statements, a number of firms reportedly sent junior-level staffers to the conference anyway — and no one has said outright that they would no longer be working with the Saudi Arabian government. Though there’s never been anything like the outrage over Khashoggi’s apparent murder, there’s too much at stake for the tech industry to forswear the Kingdom’s money piles altogether.

The relationship between the tech industry and the Kingdom of Saudi Arabia has always made clear business sense for both parties. In the decade after the Great Recession, San Francisco Bay Area tech companies like Uber and Slack began to skyrocket in value amid exploding user growth and successive rounds of American venture capital. Meanwhile, Saudi Arabia’s billionaire rulers, cognizant that Aramco dollars wouldn’t be flowing forever, began staking out an investment portfolio to reflect a new ambition of a greener, high-tech future for the Kingdom.

Prior to Khashoggi’s killing, the leaders of Google, Amazon, and other companies proudly palled around with Crown Prince Mohammed bin Salman. Many even signed on to the Saudi $500 billion “megacity” project/boondoggle Neom, and some, like the powerful venture capitalist Marc Andreessen, have yet to even address the Khashoggi affair. All this, even after MBS rounded up his family members and imprisoned them at the Riyadh Ritz-Carlton a year ago; apparently kidnapped the prime minister of Lebanon in a bungled scheme to cast suspicion on Iran; and pursued (with U.S. support) a proxy war against Iran in Yemen that has yielded what the United Nations deems “the world’s largest humanitarian crisis.”

To particularly hardened capitalists, or particularly cynical critics, Silicon Valley’s indifference to the human-rights record of its bankroll is unsurprising. As many have pointed out, the American business and political Establishments’ highly public revulsion to the Khashoggi murder rings hollow, given the widespread public knowledge of the Kingdom of Saudi Arabia’s awful human-rights record. Silicon Valley, with its paeans to changing the world, comes under particularly harsh criticism: “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,’” wrote critic Anand Giridharadas in the New York Times earlier this month.

But the basis of this indifference stems from a particularly domestic problem. Kara Swisher, the influential technology journalist, noted on her own podcast that Silicon Valley is so dependent on Saudi funding at this point that “if you remove the Saudis from the worldwide global network, everything collapses.”

Twenty years ago, the way that tech companies raised money worked something like this: A start-up raises relatively small rounds of funding, and when it was prepared to accept larger amounts of investment and pay out its early investors and employees, it would file to go public. But over the last decade, as Silicon Valley firms have seemingly swelled with cash, raising multimillion- and multibillion-dollar rounds of financing, a curiously small number of so-called “unicorn” companies (valued at $1 billion or more) have actually gone public. According to the National Venture Capital Association, 59 tech companies went public in 2017 compared to an estimated 300 IPOs at the height of the dot-com bubble in 1999.

Although the dot-com bubble’s burst correctly reflected the fact that many of those tech companies that had gone public were barely generating any revenue (if they were making money at all), the current trickle of IPOs is still disproportionately low; there are currently about 282 such unicorns, according to analysts at CB Insights. Instead, these firms have been able to find their funding elsewhere.

In the United States, traditionally conservative investment giants like T. Rowe Price and Fidelity began acquiring large stakes in “late-stage” tech start-ups, most notably Uber. Across the Pacific Ocean, well-capitalized sovereign funds in countries like Singapore and Saudi Arabia, alongside individual billionaires, such as friends of Vladimir Putin who emerged from the rubble of the Soviet Union, like Yuri Milner, arrived with open arms to fill Silicon Valley coffers.

Uber is an instructive example. Privately valued at around $60 billion, the ride-hailing company has bled cash for the entirety of its existence. Even though it aims to bring in $10 billion in revenue this year and plans to go public sometime in 2019, the company reportedly lost $891 million on $2.8 billion in revenue in the second quarter alone.

Though losing money hand over fist for several years on end might strike some as folly, early stage venture capital investors tend to encourage this kind of spending (colloquially known as a “burn rate”) if it produces a growth in users. But Uber — and many other start-ups like it — isn’t prepared to go public, open up its books (which would surely reveal substantial losses), and stake its value on the stock market. Unlike the dot-com bubble, where hundreds of companies were quickly midwifed through the IPO process while making the banks that underwrote those deals quite fat on fees, nowadays older start-ups that have already absorbed billions of dollars in funding have found easy money in the hands of other private investors, like, say, the Kingdom of Saudi Arabia.

In the last decade, according to data gathered by Quartz, Saudi Arabia has invested more than $6.2 billion in American tech companies. These investments span substantial holdings in Uber, Snap, Lyft, Magic Leap, in addition to backing a fund (more on that in a second) which has stakes in Slack, Wag, WeWork, and many more. These dollars have a habit of trickling down even further: WeWork, for example, has invested in office and realty companies, including The Wing, which makes Saudi Arabia (where women are still required to have male “guardians”) an indirect backer of the feminist-branded office space.

Saudi Arabia’s most significant tech investment, however, is the $90 billion it has committed to two separate “Vision” Funds created by the Japanese conglomerate SoftBank. The first Vision fund, led by SoftBank’s venerated leader Masayoshi Son, aims to deploy $100 billion of capital in tech companies across the world. It’s a tidal wave of money designed to give Vision investors chunks of the largest and seemingly indomitable late-stage tech start-ups; for Saudi Arabia, it’s one prong of the strategy to get ahead of the decline of its oil riches.

Of course, it’s not just Saudi Arabia. Limited or outright nondemocratic governments with spotty human-rights records like Qatar (also an Uber investor), Singapore, and Kuwait have all set up shop in Silicon Valley. Talk to American venture capitalists or start-up founders and it’s easy to understand why there’s such an appetite for these foreign dollars: The investors disbursing them tend to be pretty passive (Saudi Arabia didn’t lead the Uber boardroom coup against Travis Kalanick), and they’re willing to provide cash for equity at prices that would make bigger-name American investors balk.

To imagine that Silicon Valley would walk away from Saudi Arabian money at this point would be to assume that the industry is willing to sacrifice easy investment dollars that grant privately owned tech companies privileges that the wider world does not. Silicon Valley’s fixation with keeping founders in near total control of their companies, and siloing them from the stock market, is so deeply rooted to the point that it is now uncontroversially received as the only way the industry can achieve the “disruptive innovation” required to churn out billion-dollar company after billion-dollar company.

Given American businesses’ soft exit from “Davos in the Desert” and from the boards of transparently silly Saudi endeavors like Neom, it’s hard to think that something like the murder of Jamal Khashoggi could change the status quo, despite the nervous hand-wringing in the press. Besides, it’s not like Silicon Valley was persuaded by everything much worse that it knew much earlier.