If Silicon Valley is sincere about “changing the world”, it should return Saudi billions until alleged murder of Jamal Khashoggi has been suitably investigated
Technology companies can no longer turn a blind eye to the human rights abuses of one of their largest investors.
Context & Ripple Effects
This New York Times opinion landed mid-crisis: days earlier, the Wall Street Journal reported that Silicon Valley was mostly quiet about its Saudi ties even as Khashoggi's disappearance became a scandal, with Saudi Arabia standing as the largest funding source for US startups. The editorial's demand — return the money until the alleged murder is investigated — directly targets SoftBank's Vision Fund, which received $45B from Riyadh and every founder downstream of it.
What makes the piece worth revisiting is how the arc resolved: within weeks, startups like View and Zume were still raising $1.5B from Saudi-backed vehicles, and by early 2019 a $500M SoftBank-led Flexport round was underway. The call for a moral repricing of Saudi capital effectively failed.
First-order effects
- SoftBank faces an immediate LP-reputation problem: its flagship fund is structurally tied to Saudi money at the exact moment founders and employees are asking questions about its source.
- Founders currently raising from Saudi-backed vehicles — View, Zume, and others in the pipeline — must decide whether to accept capital that now carries a public human-rights association.
Second-order effects
- Competing investors gain a talking point rather than a constraint: any firm that publicly distances itself from Saudi money can differentiate to talent and customers, yet the continued flow of deals shows no fund can afford to fully opt out of that capital pool.
- Saudi Arabia absorbs the criticism without losing leverage — the kingdom's position as the largest startup funder means the punishment for the alleged murder lands mostly on the critics' side of the table.
Third-order effects
- If the pattern holds — and the 2023 coverage of a16z openly courting Saudi money suggests it did — reputational shocks stop functioning as a check on sovereign-wealth funding in venture, and access to state capital becomes an openly contested competitive advantage among top firms.
- The episode points toward a venture industry where LP ethics are priced in only when they threaten deal flow, leaving accountability to regulators and journalists rather than the funds themselves.
The trend: US venture capital's dependence on sovereign wealth has proven durable enough to outlast even its gravest reputational test, moving from quiet embarrassment in 2018 to open courtship by 2023.