Donald Trump’s US election win led to a surge in stock prices across Wall Street, with big tech firms among the major beneficiaries. Nvidia and Alphabet shares rose 4% on the news and major OpenAI investor Microsoft also enjoyed gains, as analysts anticipate a hands-off approach to AI regulation under the Trump administration.
Tech CEOs, including Amazon’s Jeff Bezos, were quick to congratulate Trump after his victory and Tesla founder Elon Musk, who supported Trump on the campaign trail, has been appointed to lead the newly created Department of Government Efficiency, alongside Vivek Ramaswamy.
Trump has been vocal about his intention to reassess domestic chip production, mergers and acquisitions, antitrust regulation, AI and sustainability. These are the changes technology leaders can expect under the new Trump administration.
When the CHIPS are down
The president-elect has been vocal about the CHIPS and Science Act, which was enacted under Joe Biden. The act is an interventionist piece of legislation designed to shore up domestic US technology investment and includes subsidies for semiconductor manufacturers. Speaking on The Joe Rogan Experience podcast in the run up to the election, Trump described the policy as “so bad”.
Some within the industry agree with Trump’s assessment. “He’s absolutely spot on about the CHIPS Act,” says Malcolm Penn, founder of semiconductor analyst Future Horizons. “It’s only subsidising companies that are already at the top of the game.”
Of the $280bn (£220bn) total package, $52bn (£41bn) was allocated for manufacturing subsidies to bring fabrication plants to the US. Companies that have benefitted from the subsidy include Intel, TSMC, Samsung and GlobalFoundries.
Given the long-term outlook of the legislation, it’s unlikely that the act will be scrapped outright, says a spokesperson for Taiwanese tech manufacturers GlobalWafers. “Multi-year and decadal programmes like the CHIPS Act and the agreements we have signed are regularly continued from one administration to the next.”
Penn adds that neither the CHIPS Act, nor its equivalent in the EU, the European Chips Act, address the “fundamental problem” of why production went offshore in the first place.
“It wasn’t because other governments were offering incentives to build factories,” says Penn. “Nobody wanted to build a factory – they all wanted to go asset-light. They’re not addressing that problem, which is a financial, cheap, balance-sheet problem. People wanted to keep that money and pay it out as dividends rather than invest in bricks and mortar.”
AI’s future looking bright
In the run up to the election, Trump promised to repeal Biden’s executive order on AI, which includes guidelines for responsible and safe use of the technology. The Republican platform set the tone for AI deregulation, describing the order as “dangerous” and anti-innovation.
However, this doesn’t mean the Republicans disagree with all elements in the order. AI safety is not a partisan issue for the voter base, according to Peter van der Putten, director of the AI Lab at Pegasystems. A recent Ipsos poll found that 70% of US citizens, whether Democrat or Republican voters, are in favour of AI safeguards for the big tech platforms. And there are some AI safety features, such as privacy, that particularly resonate with Republican voters.
“They’re probably going to repeal the Biden order,” says van der Putten. “But what that means in terms of policy is still open. I think there’s elements Trump liked and elements he didn’t.”
Trump will have a much more unimpeded political path for his policies this time around
Trump’s position on tech policy has varied widely and is often erratic. He’s on the record touting the utopian possibilities of generative AI as well as decrying its dystopian potential. His possible appointment of Elon Musk further complicates predictions. AI expert Max Tegmark, notes Musk has been outspoken about the so-called existential risk of AI and recently moved against the grain of his peers to support the failed AI Bill in California.
Both the Republicans and the Democrats view artificial intelligence and technology more broadly as a national security issue.
Speaking at an Ada Lovelace Institute event this week, executive director of the AI Now Institute Amba Kak said: “Towards the end of the Biden administration, and certainly in the Harris campaign, it was very clear that the securitisation of AI, and specifically AI industrial policy, was not a partisan issue. It was absolutely across the board.”
Van der Putten adds: “There are certain topics Trump cares deeply about, such as competition with China and globally. Cybersecurity, national security and AI plays into those.”
GenAI and the environment
During the presidential campaign Trump vowed to “drill, baby, drill”, indicating that he is less interested in the environment than he is in competition and security. For the big tech AI providers, which require large amounts of energy and water to power their systems, this could be a welcome sign.
Tech companies that had previously touted their green credentials are now retreating from this messaging and technologists, such as former Google CEO Eric Schmidt, have suggested AI companies should be untethered from sustainability goals.
TechMarketView principal analyst Craig Wentworth says: “A deregulating Trump administration may be sympathetic to this view, especially if it might help strengthen America’s long-term competitiveness. Other countries may then feel compelled to follow suit, in order to maintain their own competitiveness.”
However, he adds that removing AI from Scope 3 emissions calculations would be a “blunt and risky” measure. “Not all AI energy is being devoted to saving the world from climate disasters,” he says. “Inconsistent calculations will throw a spanner in the works when it comes to benchmarking companies or countries on their progress towards net zero.”
Competition and monopolies
Under the Biden administration, the US Department of Justice (DoJ) has taken an unusually aggressive approach to monopoly concerns. The justice department has filed antitrust lawsuits against Google and is considering breaking up the Alphabet-owned business in what would be the most significant US anti-monopoly case since the Bell System was dismantled in the 1980s.
However, the final ruling of the DoJ will not go ahead until April 2025, leaving Trump time to change course.
Meanwhile, Federal Trade Commission chair Lina Khan challenged Microsoft over its acquisition of Activision Blizzard and Meta over its purchase of virtual reality startup Within. Both deals eventually went through.
This may cause friction between Trump and vice-presidential pick JD Vance, who has previously expressed support for Khan’s challenges against big tech. Vance’s advisor, Gail Slater, will also be vetting Khan’s replacement.
It’s anticipated that any new appointment will take a less aggressive approach to antitrust policy and could spark a wave of M&A deals during Trump’s term in office.
While it may be too early to tell what impact the incoming Trump administration will have, Wentworth expects tech CEOs that have explicitly supported the incoming president, such as Musk, to be the primary beneficiaries of any change in legislation. Deregulation could also benefit other tech businesses in the same markets as Trump’s supporters.
However, this will be a cause for concern for some. “Trump will have a much more unimpeded political path for his policies this time around,” Wentworth adds. “No business wants to be caught on the wrong side of the president-elect’s favours.”
