Silicon Valley: Trapped Between Social Good and Bottom Line

(Bloomberg) -- It's a tough time to be a tech company, advocating for social good while focusing on the bottom line.

Now that Saudi Arabia has admitted that journalist Jamal Khashoggi died at the hands of its agents, companies that benefit from doing business with the country face a tough decision: stick or twist.

Uber’s Dara Khosrowshahi was among the CEOs who dropped out of this week's “Davos in the Desert” summit. Google, fresh from deciding not to compete for a U.S. military contract because it could violate its ethics, pulled top cloud executive Diane Greene from the event. But Google has said nothing about the future of the deal it struck in March with state-run Saudi Aramco to provide cloud services that will form part of an economic modernization push within the kingdom.

Softbank CEO Masayoshi Son also decided not to speak at the last minute (though he did go to Riyadh), yet the company remains one of the kingdom's closest business partners. Crown Prince Mohammed bin Salman, the architect of the push for reforms, was behind $45 billion of the nearly $100 billion in SoftBank’s Vision Fund, the world’s biggest tech investment vehicle. Some Republican senators have said the prince is responsible, directly or not, for Khashoggi’s death.

Despite all the vocal outrage right now, it’s more likely that the tech beneficiaries of Saudi largesse will try to wait it out, hoping the controversy blows over by the next time they need financing or sign a big IT contract.

Meanwhile San Francisco-based firms are deciding whether to support or oppose a November ballot initiative that would tax corporations in order to pay for a solution to the city’s homelessness problem. Stripe and Lyft, startups with mega-billion market caps, are among the big donors to a group opposing the effort.

Twitter CEO Jack Dorsey has used his own platform to whinge about the measure, drawing the ire of Salesforce CEO Marc Benioff, who is spending his own and his company's money to support it. It's a repeat of a similar fight in Seattle where city council members passed this kind of a tax, then repealed it just weeks later amid massive corporate opposition led by startups and behemoth Amazon, which threatened to halt expansion in the city.

To be sure, many of these companies and their leaders, notably Amazon, make serious donations to aid non-profits fighting homelessness. But these types of taxes are the wrong way to go about it, they say. And they seem more eager to take on the role of noblesse oblige doling out donations than the role of corporate taxpayer.

Over the weekend, the New York Times reported the Trump administration is considering defining gender as an unchangeable characteristic determined at birth, a strong move to roll back rights and protections of transgender Americans.

When North Carolina passed a bathroom bill that targeted the same group and Texas considered one, companies from Salesforce to PayPal to Facebook were vocal in their opposition. What will some of these same companies do if the federal government acts against the trans community? It's one thing to threaten a boycott of Texas or Georgia, quite another to avoid doing business with one's own federal government and its billions of dollars in tech contracts. 

It’s possible that Silicon Valley may resort to one of its favorite tactics: hiring someone and giving them a fancy title that indicates they’re taking the problem seriously. Benioff is considering hiring a chief ethical officer, but as Kara Swisher pointed out in a New York Times column, how do you enforce an ethical system in a company? Google’s “Don’t be evil” mantra doesn’t seem right either. This is one issue that can’t be solved with an algorithm.

And here’s what you need to know in global technology news

It’s tough to sell video games in China these days. The latest: regulators are cracking down on the last remaining window for making money from titles.

Uber’s secret kitchens: the company is finding a way to deliver food to Uber Eats customers, whether a restaurant exists or not. 

Sales pitch: identifying immigrants, using Amazon’s AI  face-recognition technology. In other news, Amazon-branded women’s apparel sales are languishing, according to a report.

Made in Singapore: that’s where Dyson will build its electric cars.

To contact the editor responsible for this story: Reed Stevenson at rstevenson15@bloomberg.net

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