'I'm Going to Unleash the Brains': Top GOP Recall Challenger Larry Elder on Big Tech

Harri Weber

Harri is dot.LA's senior finance reporter. She previously worked for Gizmodo, Fast Company, VentureBeat and Flipboard. Find her on Twitter and send tips on L.A. startups and venture capital to harrison@dot.la.

Larry Elder

Gov. Gavin Newsom is holding onto a narrow lead, but if he fails to rally apathetic Democratic voters in the fast-approaching recall election, the Republican frontrunner could upend the state's outlook on the tech industry.

Newsom, who grew up a stone's throw from Silicon Valley and who brought in a former Google executive into his administration, is facing a leading competitor who believes "big tech is after us and what we believe in." If he's ousted by a Republican, the next governor could even tip the balance of the U.S. Senate should 88-year-old Diane Feinstein have to bow out. She's only half way through her six-year term.

It's no wonder Netflix co-CEO Reed Hastings and other tech leaders like former Google CEO Eric Schmidt and former Yahoo CEO Marissa Mayer are collectively doling out millions to fight the $276 million recall.

Newsom's challengers are largely Republican, and polls say Republican voters are more motivated to vote come September 14. Among the GOP, two recent polls show Black conservative talk show host Larry Elder, who has stoked outrage over his views on women in the workplace and systemic racism, is leading others in the race to oust the Democratic governor.

He is followed by former San Diego Mayor Kevin Faulconer and perennial candidate and attorney John Cox — two candidates who appear to have little to say on the matter of big tech. The same polls show reality-TV star and former Olympian Caitlyn Jenner trailing far behind. A third poll shows Elder ranking second, behind Democrat and 29-year-old millionaire YouTuber Kevin Paffrath, who's pitched himself as a centrist alternative.

Elder's coronavirus-focused campaign has called for unwinding existing coronavirus restrictions. It's blasted pandemic-era state and federal relief programs and pointed to the many failings of the Employment Development Department (EDD). Elder's website is comparably sparse on other topics, briefly touching on school choice and lowering taxes. And he has shown little interest in defining substantial policies.

Where does the current leading GOP candidate stand on tech, the industry that's swelled to define much of the sunshine state? Elder's comments run the gamut, from vowing to "unleash the brains" in Silicon Valley to tweeting that big tech wants to "destroy" conservatives' income and "cancel" them.

That's in stark contrast to Newsom, who literally wrote a book called "How to Take the Town Square Digital." The former San Francisco mayor campaigned on expanding early access to computer science education and boosting broadband infrastructure. Recently he's leaned on big tech to power the state's response to COVID-19, allegedly hampering state and local health departments in the process, per Protocol.

To get a glimpse of what a victory by Elder, who has never held public office but fancies himself the "sage of South Central," would mean for the tech sector, we took a look at the leading GOP candidate's statements to date on Silicon Valley, YouTube, Google, Russian bots, workers' rights and more. Elder, who has shown a distaste for mainstream press, did not respond to multiple requests for an interview.

"I'm Going to Unleash the Brains"

In an interview with the "San Joaquin Valley Sun" earlier this month, Elder said he'd lean on Silicon Valley's "brainiacs" to solve the state's water crisis.

"Israel is water self sufficient, so is Dubai. Israel sits on the coast of a little body of water known as the Mediterranean. We have a little body of water known as the Pacific Ocean," he said "Why we can't [sic] figure out how to become water self-sufficient when we have all these brainiacs in Silicon Valley. So I'm going to unleash the brains and the technology and use the bully pulpit to explain to people why we need to do this."

He may have a tough time. While humans have removed salt from water for thousands of years, wide-scale desalination is an energy-intensive process with serious drawbacks. Among them: high costs, harm to marine life and emissions from plants powered by fossil fuels. But this statement response is typical of Elder, who rarely delves into the finer points of issues.

"Big Tech Is After Us"

Elder has contributed to sites known for misinformation, and the candidate says he has been demonized by big tech. In a tweet about his account being limited by YouTube, Elder promoted a subscription to his now-defunct homegrown video site and said, "Big Tech is after us and what we believe in. They want to destroy our income because they want to cancel us!"

Elder's video site, LarryTube.com, has since merged with the Epoch Times' video site. The Falun-Gong backed Epoch Times has relied heavily on Facebook to build its large subscriber base and has been criticized for misinformation campaigns.

While claims that social media companies are biased against conservatives lack evidence, Elder has covered the topic extensively, including on YouTube and in his columns.

Similarly, on YouTube this past April, Elder decried Twitter's decision to ban former President Trump from its platform. In his buttery talk-radio voice — a foil to Newsom's Will Arnett-esque gravel — he said: "You think Americans are too stupid to figure out when somebody's telling the truth or when somebody's lying."

On Russian Bots

Elder is skeptical of Russian interference in the election. In a 2018 column titled "Russian Bots vs. Media/Academia/Hollywood — Which Had A Bigger Impact On The Election?," Elder downplayed the impact of fake accounts that were created to promote election misinformation. He wrote, "Whatever influence Russia may have had on the elections is dwarfed by the 'collusion' of the largely anti-GOP media, academia and Hollywood. If the right dominated these fields, congressional Democrats would demand hearings."

On the EDD's "Antiquated Technology"

Elder wants to revamp the website for the Employment Development Department, which doles out Californian's unemployment benefits. Elder's campaign site devotes special attention to the EDD, which has struggled with a vast backlog of unemployment claims and failed to detect an estimated $31 billion in fraud. In one paragraph, the candidate pledged to revamp the agency's technology and "promote public-private partnerships."

"As governor, I would revamp the EDD's antiquated technology, which created an unprecedented backlog and the absurdity of the agency not being able to automatically process some half of its claims online at the height of the pandemic. Gavin Newsom wants to simply throw more money at the problem. I will implement structural reforms to remove roadblocks to efficiency in the EDD's IT system and across the state government. That means promoting public-private partnerships and overhauling the state government's cumbersome procurement process, which currently favors Sacramento insiders over easy access to innovation."

On Women's Rights and Venture Capital

Elder thinks mothers are a business risk. In his book, "Showdown: Confronting Bias, Lies, and the Special Interests that Divide America," Elder wrote, "Are there legitimate business reasons for a venture capitalist to ask a female entrepreneur whether and when she intends to have children? Hell, yes."

"Call it protecting an investment," the candidate said in the 2002 book.

On Reddit and Gamestonks

Elder suggests that the trading app Robinhood allows gambling. In another YouTube video, Elder commented on the Reddit-driven meme stock craze, saying, "I've been trying to understand this Gamestop thing, and how it's been characterized as 'David versus Goliath.' I am a big fan of investing in the stock market. I'm a big fan of believing in America. I believe in investing. I don't believe in gambling. This strikes me as gambing."

There Should Be "a Conservative Google"

Elder doesn't appear to support the antitrust case against Google.

When social media companies limited the reach of a "New York Post" story on Hunter Biden, Elder said in a Fox News interview: "It's an outrage. It's akin to making an in-kind campaign contribution — the way that Google admitted that they restricted the New York Post story [...] This is absolutely outrageous and all of these big tech companies are in bed with the Biden administration and they want Donald Trump to go down."

He continued, commenting on the Justice Department's antitrust case against Google:

"I've never been fond of government busting up large corporations. The larger the corporation typically the more arrogant it gets, the more dismissive it becomes of its consumers, and that's what you've got here. In the past, when the government's gone after big companies like IBM, like Microsoft, it's been because their competitors have complained.

"In this case the consumers are complaining, and it seems to me the response ought to be a conservative Google. There ought to be some sort of conservative alternatives. And there is an alternative to Twitter, it's called Parlor, and I joined that a few days ago. And it seems to me [..] we ought to be coming up with our own alternatives for search engines and social media platforms, so we don't have to run the risk of being screwed by these people who hate our guts."

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🏰 Disney's Epic Investment Stands Out Amidst Gaming Industry Layoffs

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

🔦 Spotlight

In the midst of widespread gaming industry layoffs, a glimmer of positive news emerges as Disney announces a significant move: a $1.5 billion investment in Epic Games. 🏰💰🐭

Image Source: Disney

Disney's $1.5 billion investment in Epic Games, disclosed late Wednesday, signals a strategic alignment aimed at expanding the success of "Fortnite." The deal enhances Epic's growth prospects after financial setbacks, including layoffs, and strengthens the partnership between the two companies. With Disney gaining a larger equity stake in Epic, the collaboration will broaden the integration of beloved Disney franchises like Marvel, Star Wars, Pixar, and Avatar into the game, potentially boosting its appeal and longevity. This significant investment underscores Disney's commitment to interactive entertainment and signifies a shift towards games as a primary revenue stream, aligning with the growing trend of digital engagement among younger demographics. Moreover, the potential for crossover sales of physical Disney products within "Fortnite" and the exploration of new content distribution channels are just some of the opportunities arising from this partnership.

For LA tech, the Disney-Epic Games partnership represents a validation of the region's burgeoning tech and gaming ecosystem. The substantial investment in Epic, who maintains a large Los Angeles office with 1,000+ employees (according to LinkedIn), reflects confidence in the LA’s talent pool and innovation potential. Additionally, this partnership between two industry giants fosters an environment for further collaboration, investment, and growth within LA's tech sector. As Disney and Epic Games deepen their ties and explore new avenues for content integration and distribution, it not only elevates the prominence of LA as a tech hub but also stimulates economic growth and job creation in the region. This partnership highlights LA's unique position as a hub where technology and entertainment converge. With its ability to integrate diverse industries, LA is driving innovation and expansion in digital entertainment. 🚀💸🎮

🤝 Venture Deals

LA Companies

  • ProducePay, a financing and marketplace platform for the fresh produce market, raised a $38M Series D led by Syngenta Group Ventures joined by Commonfund, Highgate Private Equity, G2 Venture Partners, Anterra Capital, Astanor Ventures, Endeavor8, Avenue Venture Opportunities, Avenue Sustainable Solutions, and Red Bear Angels. - learn more
  • Blush, an invite-only dating app that drives users to local businesses on dates, raised a $7M Seed Round from individuals like Naval Ravikant. - learn more
  • Mogul, a startup founded last year that provides an overview of an artist's royalty earnings and identifies areas where money is owed but has not yet been collected, raised a $1.9 million seed round from Wonder Ventures, United Talent Agency, AmplifyLA, and Creator Partners. - learn more
  • Avnos, a hybrid direct air capture startup, raised a $36M Series A led by NextEra Energy and joined by Safran Corporate Ventures, Shell Ventures, Envisioning Partners, and Rusheen Capital Management. - learn more
  • AI.fashion, startup whose mission is to help retailers enhance the online shopping experience by providing consumers with virtual try-ons and personalized fashion recommendations, raised a $3.6M Seed Round led by Neo. - learn more
  • Suma Wealth, startup that aims to demystify financial topics and provide culturally relevant content, virtual experiences, and resources to help Latino users navigate financial challenges and opportunities, raised a $2.2M Seed Round . Radicle Impact led, and was joined by Vamos Ventures, OVO fund and the American Heart Association Impact Fund. - learn more
  • 222, a startup that helps users discover their city and meet new people through unique social experiences, raised a $2.5M Seed Round. Investors included 1517 Fund, General Catalyst, Best Nights VC, Scrum Ventures, and Upfront Ventures. - learn more
  • LimaCharlie, a security operations cloud platform, raised a $10.2M Series A led by Sands Capital. - learn more
  • Polycam, an app that uses a smartphone’s sensors to capture 3D scans of objects, raised an $18M Series A co-led by Left Lane Capital and Adjacent, and joined by Adobe Ventures and individuals like Chad Hurley and Shaun Maguire. -learn more.

LA Venture Funds

Actively Raising

  • ReelCall, Inc., an entertainment technology company focused on powerful apps and platforms that help build and maintain the professional network of connections vital to career growth, is raising a $850K Pre-Seed Round. - learn more
  • CZero, a startup building software to decarbonize logistics for logistics businesses and goods business through a vetted marketplace and optimization software. - learn more
  • Couri, a technology startup addressing last-mile delivery issues, is raising a $450K Pre-Seed Round at a $2.2M post money valuation. - learn more
  • Sweetie, a marketplace to help people plan date nights, is raising a $1.5M Pre Seed Round. - learn more
  • StartupStarter, an investment platform that provides real-time data and analytics on startups, is raising an $850K Angel Round. - learn more

If you’re a founder raising money in Los Angeles, give us a shout, and we’d love to include you in the newsletter!

Venture Waves, Climate Tech Wins, and Silicon Beach's Ongoing Evolution

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Anduril Seeks $1.5B in VC Funds

Defense company Anduril Industries Inc., based in Costa Mesa and founded by Palmer Luckey, is seeking to raise $1.5 billion in fresh funds to boost its valuation to $12.5 billion or more, according to sources quoted by The Information. This fundraising effort, if successful, would mark one of the largest venture capital rounds of the year.

Image Source: Anduril

Anduril recently secured a contract to develop and test small unmanned fighter jet prototypes under the Air Force’s Collaborative Combat Aircraft (CCA) program, beating out major defense companies like Boeing, Lockheed Martin, and Northrop Grumman. Alongside General Atomics, Anduril will design, manufacture, and test these aircraft, with a final multibillion-dollar production decision expected in fiscal year 2026. This program aims to deliver at least 1,000 combat aircraft to fly in concert with manned platforms and is part of the Air Force’s Next Generation Air Dominance initiative. Central to Anduril’s success in this contract is the Fury autonomous air vehicle, acquired through the purchase of Blue Force Technologies. This victory underscores Anduril's rapid advancement in the defense sector, aligning with Luckey's vision of building faster and more cost-effective defense assets. - learn more

Los Angeles Ranks Number 1 in Emerging Climate Tech Hub

The 2024 Emerging Climate Tech Hubs Report by Revolution highlights Los Angeles as a burgeoning center for climate tech innovation. LA's growth in this sector is driven by its diverse talent pool, strong research institutions, and a culture of environmental consciousness. The city's unique mix of legacy industries, such as entertainment and aerospace, alongside emerging tech companies, positions it as a pivotal player in the climate tech landscape. This shift reflects a broader trend of decentralized climate tech funding across the U.S., reducing the historical dominance of California's traditional hubs. - learn more

Silicon Beach: Looking Back, Moving Forward

Assessing the overall health of the startup market is challenging, especially as venture capital funding has decreased by an average of 61% from 2021 to 2023 across the top VC markets in the US. Markets with robust ecosystems in AI, SaaS, Biotech, Healthtech, and Fintech appear to be weathering the downturn better than those focused on Consumer and Gaming industries, areas where Los Angeles traditionally excels.

Percent Change In VC Funding By Region

CB Insights

LA Times paints a rather bleak outlook on the Los Angeles tech scene noting venture capital funding in Greater Los Angeles plummeted 73% from 2021 to 2022. Silicon Beach, once a vibrant tech corridor, currently faces high vacancy rates and lacks late-stage financiers, especially in the AI sector. However, there are positive signs, including growth in aerospace startups and increased venture capital investment in early 2024, suggesting a potential rebound for LA's tech ecosystem.

While LA may not be exceeding expectations during this period, its tech ecosystem warrants a nuanced evaluation, given the broader market dynamics and its strong performance in specific sectors. Reach out to us with your thoughts.

🚀 SpaceX gears up for another stellar year, active raises, and more

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Happy Friday Los Angeles! You made it through the first week of 2024!

🔦 Spotlight

Elon Musk may be a divisive (albeit entertaining) figure, but the continued success of SpaceX is pivotal for the aerospace industry in Los Angeles and more broadly around the world.

Image Source: SpaceX webcast

What happened with SpaceX in 2023?

  • Elon Musk challenged Facebook founder, Mark Zuckerberg to a cage fight.
  • SpaceX launched 96 successful missions with its Falcon series of rockets, a 57% increase over its previous annual record.
  • SpaceX conducted two test flights of the largest and most powerful rocket ever built, Starship.
  • Roughly two-thirds of SpaceX's launches in 2023 were devoted to building out Starlink, the company's satellite-internet megaconstellation.
  • Isaacson’s Elon Musk biography was published in September including everything from Musk’s tumultuous relationship with his father to his work ethic and “demon mode”.

Moving forward what can we expect from SpaceX and its controversial founder? Continued innovation pushing the aerospace industry to new limits? Yes. More drama? Without a doubt.

Here is some of what is to come in 2024:

🤝 Venture Deals

Just Announced

Check back next week!

LA Exits

  • CG Oncology, an Irvine, CA-based developer of immunotherapies for bladder cancer, filed for a $100M IPO. It plans to list on the Nasdaq (CGON) with Morgan Stanley as left lead underwriter, and has raised around $317m in VC funding. - learn more
  • McNally Capital agreed to sell Advanced Micro Instruments, a Costa Mesa, CA-based maker of gas analyzers and sensing technologies, to Enpro (NYSE: NPO). - learn more

Actively Raising

  • ReelCall, Inc., an entertainment technology company focused on powerful apps and platforms that help build and maintain the professional network of connections vital to career growth, is raising a $850K Pre-Seed Round. - learn more
  • CZero, a hard-tech startup that is developing a technology for decarbonizing natural gas, is raising a $1.5M Seed Round. - learn more
  • Couri, a technology startup addressing last-mile delivery issues, is raising a $450K Pre-Seed Round at a $2.2M post money valuation. - learn more
  • Sweetie, a marketplace to help people plan date nights, is raising a $250K Angel Round. - learn more
  • StartupStarter, an investment platform that provides real-time data and analytics on startups, is raising an $850K Angel Round. - learn more

If you’re a founder raising money in Los Angeles, give us a shout, and we’d love to include you in the newsletter!

📅 LA Tech Calendar

Sunday, January 7th

Wednesday, January 10th

  • Startup Cafe: Networking with a Kick - Entrepreneurs, Startups, and Tech Enthusiasts join together to meet and connect with like-minded people, industry professionals and investors, while enjoying a nice cup of coffee in Venice at The KINN. This week’s interactive discussion about AI’s evolution in entertainment will feature Dr. Sam Khoze and Rachel Joy Victor.
  • Venice Tech Happy Hour- Join Startup Coil and FoundrHaus Wednesday evening and enjoy the sunset from the rooftop, grab a bite overlooking Abbot Kinney, and mingle with other tech enthusiasts and entrepreneurs by the bar on the patio.

Have an awesome event coming up? Reach out to be featured on next week’s Newsletter!

📙 What We’re Reading