Silicon Valley, a global hub for technological innovation, is attracting scrutiny for its investment practices and tolerance of controversial figures. The region’s high-risk, high-reward culture fuels game-changing breakthroughs. It also opens the door to dangerous people with checkered pasts. This environment has created a context where people like Dr. He Jiankui can more easily find funders, backers and investors even after scandals.

As volunteers with SV Creates will tell you, the Valley’s prestige as a hub for nascent technologies and scientific discoveries is irresistible. The area is perhaps best known for its high-octane, go-go culture with a penchant for risk-taking. This culture has brought forth the likes of Elizabeth Holmes, the founder of Theranos, who purportedly promised to change blood testing technology as we know it.

Holmes, then only 19 years old, started Theranos. She claimed that she invented machinery that could run hundreds of tests on tiny vials of human blood. This innovation reduces costs by 90%. A single blood prick. In 2015, Theranos became the United States’ most valuable startup at $10 billion. The mechanics of Holmes’ technology were – and still are – unclear. She and her partner were subsequently convicted on several counts of various forms of fraud and are currently serving lengthy prison sentences.

The Valley had already taught people like Sam Bankman-Fried and so many others that rule-breaking—and go fast—was a virtue. Bankman-Fried’s crypto exchange, Alameda Research, has since filed for bankruptcy, and the Ponzi scheme unraveled late last year following the collapse of the volatile crypto market.

Three years later, Chinese scientist Dr. He Jiankui would spark global condemnation. His work with CRISPR technology on human embryos was controversial and resulted in the birth of gene-edited babies. Dr. He is currently pursuing a round of funding in Silicon Valley. His new company’s mission is to use the power of gene editing to lower the risk of developing Alzheimer’s disease.

This chase for money begs the question of whether the Bay Area has the ability to Silicon Valley their way past old mistakes. The region’s understandable focus on encouraging future innovation can easily trump the needs of the people on the receiving end of their investment.

The “move fast and break things” mentality certainly spurred innovation, but it cultivated a culture that allowed deception to flourish. Devin AI at launch was promoted as the world’s “first AI software engineer.” Then it became clear that it was incapable of doing even the easiest engineering work. The company behind it, Cognition AI, faced accusations of deception and slashed its price from $500 to $20 per month following the controversy.

Now, picture this—the venture capital firms of Silicon Valley raised something like $70 billion in 2024—all chasing after the next disruptive technology. The downside is that roughly 90% of startups that venture capital firms bet on eventually go bust. Silicon Valley investors love risk and celebrate failure. With our partners, they can’t wait to fund innovative ideas to show their unequivocal belief in making these ideas to life.

This hunger or desperation to invest in the next big thing, with the ability to take a risk on an emerging technology, leaves these investors vulnerable to being exploited. - REUTERS

Silicon Valley’s culture tells people to “break rules and stuff, and then go fast.” However, as innovative as this approach may be, it has proven to create an environment ripe for ethical breaches and even fraud. The region’s appetite for risk, though fostering a spirit of innovation through technology development, opens doors that unscrupulous actors with a controversial agenda can walk through.