The military and the alphabet soup of Fed cops gave birth to the Valley. After WWII, all those shipbuilder engineers and all those radar engineers and all those radio engineers and the tame academics at Cal Tech and Cal and Stanford sorta congealed, did a bunch of startups and built a bunch of crap their buds in the Forces would buy.
Khaki money stunted the Valley. Generals didn't need to lobby in Congress for bigger appropriations. They just took home black budgets that were silently erased from the books, aerosolized cash that they misted over the eggheads along Highway 101. Two generations later, the Valley was filled with techno-determinists, swaggering nerd squillionaires who were steadfastly convinced that the money would flow forever and ever amen.
Then came Hollywood, the puny $35 billion David that slew the $600 billion Goliath of tech. They bought Congresscritters, had their business-models declared fundamental to the American way of life, extended copyright ad [inifinitum|nauseam] and generally kicked the shit out of tech in DC. They'd been playing this game since 1908, when they sued to keep the player piano off the market, and they punched well above their weight in the legislative ring. As the copyright police began to crush tech companies throughout the Valley, khaki money took on the sweet appeal of nostalgia, strings-free cash for babykiller projects that no one was going to get sued over.