With the election of Trump as the next president of the United States, policy toward the tech industry will once again take a new course. This is good news for some companies, but less so for others.
On Wednesday, the curtain fell on the U.S. presidential election. After months of unprecedented political soap opera, Donald Trump (Republican Party) prevailed over Kamala Harris (Democratic Party) by an ultimately generous margin. The United States is gearing up for Trump’s second term in office.
The elections were also followed with great interest in Silicon Valley. The next few weeks should reveal what the tech industry can expect in the coming years. Will the government act with a soft or hard hand against the tech giants? For many companies, it will depend on which leaf they are on with the president.
Less blue
One interesting observation the New York Times makes is that Silicon Valley colored this election much less “blue” than usual. When Trump was first elected president in 2016, many influential figures openly spoke out against him. This time around, tech bigwigs are sticking to congratulations, heartfelt or otherwise, on social media. With Elon Musk leading the way, there were even vociferous ambassadors for Trump within the tech industry.
The tech bosses seem to realize that they had better be in good standing with Donald Trump. The president-to-be is a man who does not forget easily and not infrequently allows personal feuds to play a role in his policies. Just ask AWS, which grabbed next to the controversial JEDI cloud contract in 2019. AWS was convinced that Trump himself had pushed to award the contract to Microsoft because he and then-Amazon boss Jeff Bezos are not best friends.
Mark Zuckerberg in particular has good reason to spread treacle: Trump has already threatened to send Zuckerberg to prison. Without being allowed to pass Start first, we suspect. With Trump, you can never be sure if he means it or not, but the tech industry seems to be choosing eggs for its money.
Silicon Valley colored this election much less “blue” than usual.
Chips Act in the trash
Which course Trump will chart depends largely on who will be in which position. One thing already seems certain: the American CHIPS Act does not seem likely to last long under Trump’s rule. The Chips Act was pushed through by the Biden administration to lure chip investors to America with high subsidies. It made the likes of Samsung and TSMC tack on major infrastructure expansion in the US. It is possible that Biden would hand out the promised subsidies before his resignation.
Trump already made it clear in his signature, explicit style that he is not a big fan of the Chips Act. He does not think chip manufacturers should be given money to build factories in the US. On the contrary, he thinks imposing hefty import tariffs on technology coming from outside the U.S. is a more effective remedy.
“You impose tariffs so high that they come and build their factories for nothing,” Trump said in a recent interview. Who knows, perhaps in this more aggressive approach lies opportunity for the European Union to emerge as the promised country for chip companies?
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(De)regulation of AI
The Chips Act risks not being the only Biden legislation that will not survive Trump’s hatchet job. In October 2023, the White House approved the Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence. well, the U.S. version of the AI Act so to speak. A new bill to tighten those guidelines was met with much criticism from the industry. Although Trump has called AI a “dangerous technology” in the past, his right-hand man JD Vance does seem to be a big believer in AI.
Vance sees AI as a means of staying ahead of the great economic enemy China. That means, on the one hand, that means of making things so difficult for China will certainly not weaken. But Vance also believes that the domestic AI industry should be encouraged. Regulation, in that view, is then more likely to get in the way of innovation. The less regulation, the better, might well be the new administration’s approach.
Antitrust: soft or hard hand?
That sounds like good news for the Silicon Valley tech giants, although they shouldn’t count on too many gifts outside of possible softer AI regulation. Trump and Vance have been quite vocal in condemning the “consolidation of power” by the big tech companies. Many antitrust cases currently pending were initiated under Trump’s first term.
So is the case against Google, which recently referred to the company as a “monopolist. Google is in not too good a position with the conservative right. Vice President Vance has repeatedly accused Google of bias against conservatism, without too much evidence admittedly. One of the consequences of the recent ruling is that Google could be split up, and the new rulers certainly don’t seem to be against that. It promises to be four tough years for Google.
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One company that may somewhat surprisingly hope for a presidential pardon is TikTok. During his first term in office, however, Trump vehemently raged against TikTok. He even wanted to ban the app if TikTok did not sever ties with its (Chinese) parent company ByteDance. That didn’t happen, and on his own social media platform Truth Social, Trump even promised to save TikTok. While neighboring Canada kicked TikTok out, the U.S. opened the door again.
Musk grabs power
Most tech CEOs previously kept their distance during the election, but one man made his preference very clear. Elon Musk cast himself as the best-known face in Trump’s campaign and regularly joined him on stage during election rallies. It did not stop at physical and vocal support: Musk was a generous sponsor of the campaign and even organized a “million-dollar raffle” to recruit voters for Trump.
The bromance between Trump and Musk is not unconditional. Musk has regularly made his distaste for Biden clear over the past four years. The pandering to Trump seems likely to benefit Musk no end: there may even be a spot reserved for him on the board.
This could make Musk one of the most influential men in the global tech industry. Musk will be able to help steer who is and is not regulated and to what extent. A luxury position for Musk, who is not keen on regulation in any form on his pursuits. He can also weigh in on government policy regarding AI, social media and other sectors where he has a more than fat finger in the pie.
Which of these predictions will and will not come true will soon be seen. The tech industry knows what it stands for. Or just barely, now that Trump, with all his whims, will be back in charge. That it will not be a boring four years is the only certainty.
By openly supporting Trump, Musk could become one of the most influential men in the global tech industry.