The $16.7 billion multi-year agreement reached by Meta this month to settle youth social media addiction lawsuits may be a minor blow to the company’s vast earnings — $60 billion in profit last year alone — but the decision also reflects a nationwide backlash against the tech oligarchy.

Today, according to Forbes, the tech oligarchs make up a remarkable nine of the world’s 10 richest people, most of them in California. But for all their money and technical skills, our state’s ultra-rich are peculiarly naïve about politics and public relations.

Tech entities like Meta — which owns Facebook and Instagram — can expect mounting legal assaults from other states, as well as individuals. 

Worse yet, from Silicon Valley’s point of view, is the growing opposition to artificial intelligence among both the public and the political class. Pew notes that the number of Americans who see AI as positive has shrunk from 18% to 10% since 2021, while the number of those worried about its effects has jumped from 37% to 50%.

This can be seen in the widespread reaction against AI data centers, not only in deep blue California but across the country, including among Republicans. As energy analyst Robert Bryce points out, local rejections of data center plans have risen from nine in 2024 to 48 last year, and 70 in the first quarter of this year. 

People worry about AI taking jobs, violating personal freedom, and the future of humanity. These worries are not just cooked up by luddites or radicals; they also come from reasonable doubts about AI’s potentially disastrous ramifications, as Bill Gates recently noted. 

It’s hard to see the evolving tech economy — judging from the statements of the leading developers of AI — as a place friendly for the middle class. Silicon Valley, once a bastion of upward mobility, has become increasingly unequal, according to a recent report by Joint Venture Silicon Valley. The top .001% of Valley residents have twelve times the wealth of the bottom 50%. As tech firms have laid off workers, the few investors and top employers are getting massively rich in AI, prompting spending at almost unimaginable excess. 

AI’s boosters like to suggest that it will produce a kind of utopia. It may well be so for technocratic elites who will survive, and profit from, “a general labor substitute for humans.”  

In their new world, humans will largely be redundant, and will need to be subsidized by the state to keep from destitution. 

Those who design and control what Anthropic’s Dario Amodei calls “machines of loving grace” will reap the lion’s share of the benefits. They are already poised to make billions from a rash of IPOs.

Of course, not all non-elite work will disappear. Humans, notes a top Anthropic executive, can still find work in “grounds maintenance, like food and serving, personal care, personal service.” For now.

Ironically, the oligarchs’ woke political stances in the past are now coming back to haunt them.

Much of the opposition to AI, data centers and the oligarchs themselves comes from the nonprofit world that the oligarchs themselves have supported. They have been particularly proficient in funding the climate change activists and organizations that Bryce labeled “the anti-industry industry.”

Once, the oligarchs tried bridging the contradiction by embracing the delusion that they could power data centers with “green energy,” which is clearly not practical or cost-effective. Now “the green chickens” have “come home to roost,” as bold statements of faith in “renewables” have been shattered, forcing AI to rely on demons like natural gas. 

In the end, the oligarchs have only themselves to blame. The spectacle of vast wealth atop a vision of a mass population turned into agency-less serfs does not constitute a good public relations strategy. 

The recent physical attacks on Sam Altman’s San Francisco manse revealed a similar anti-corporate bias that has become embedded into the state’s political culture. It is so intense that the very wealthy man representing Silicon Valley himself, presidential wannabe Ro Khanna, has emerged as a key backer of a “billionaire tax” that could devastate the industry.   

The political myopia of Silicon Valley’s leaders played a part in turning once-proudly-capitalist California into a place where May Day seems more widely embraced than the Fourth of July.

Alongside the billionaire tax, left-wing legislators in Sacramento are also looking to boost the state’s income tax, already the nation’s highest, and to impose new payroll and excise taxes. 

The tech elite is to blame not only for its own political quandary, but for helping create a toxic atmosphere for other businesses and what’s left of our free market system.

To borrow from Lenin, deluded capitalists like the tech oligarchs have provided the “progressive” rope with which the rising socialist movement can hang them.

Some have left the state. Others may move abroad. If they do, the rest of us will still face the consequences of their mistakes. 

Joel Kotkin is a presidential fellow at Chapman University and senior research fellow at the Civitas Institute at the University of Texas Austin.