The technology industry will face serious questions about some of its biggest issues when Donald Trump takes office in January.
The president-elect will have a say on a range of topics including AI and antitrust regulation, as well as the future of the CHIPS Act — and all of it will have huge implications for Big Tech’s future.
Trump hasn’t had the best relationship with the tech industry over the years. He’s sparred with Amazon (AMZN) and Blue Origin founder Jeff Bezos over stories published by the Washington Post, which Bezos owns, about Trump during his first term. Trump also threatened to jail Meta (META) CEO Mark Zuckerberg after accusing him of plotting against him in the 2020 election — and says he personally reached out to Google (GOOG, GOOGL) CEO Sundar Pichai because he didn’t see enough positive stories about him in his Google Search results.
But Trump also has high-powered backers in tech, including Tesla (TSLA) CEO Elon Musk, Anduril Industries founder Palmer Luckey, and Andreessen Horowitz founders Marc Andreessen and Ben Horowitz, who donated millions to a pro-Trump super-PAC.
Now, Trump is coming into office with a Republican majority in the Senate and an expected majority in the House of Representatives, giving him extraordinary power to enact his agenda. But that doesn’t necessarily mean the tech industry is headed for a difficult four years. In fact, Trump’s second term in the White House could benefit some of tech’s major players.
The Biden administration set out to corral Big Tech’s outsized market power by launching a slew of antitrust suits against Google parent Alphabet, Amazon, and Apple (AAPL). The Federal Trade Commission, helmed by Lina Khan, also refiled a suit against Meta that was originally brought under the Trump administration that claims the social network operates as an illegal monopoly.
Alphabet CEO Sundar Pichai speaks at a Google I/O event in Mountain View, Calif., May 14, 2024. (AP Photo/Jeff Chiu, File) ·ASSOCIATED PRESS
But a second Trump administration may be less aggressive on antitrust regulation. During an interview with Bloomberg editor in chief John Micklethwait, for example, Trump said that rather than breaking up Google, which the Department of Justice under the Biden administration has floated as a possibility, he would make changes to make the business “more fair.”
It doesn’t hurt that, according to the New York Times, tech CEOs reached out to Trump in the lead-up to the election, with Pichai praising the president-elect’s stop at a McDonald’s during the campaign and Bezos calling Trump after surviving his first assassination attempt in July. Bezos and Pichai were also among the major tech leaders who congratulated Trump on his election win last week.
“The fact that he has the support of a lot of these tech titans is emblematic of a sense that they think he’s warmer to tech, but also less concerned about trying to quote ‘break up Big Tech’ on the antitrust side,” explained director of Cornell University’s Tech Policy Institute, Sarah Kreps.
Generative AI didn’t take the world by storm until well after Trump’s first term was over. As he enters his second term, the technology is all Silicon Valley, and Wall Street, want to talk about. But tech companies are also interested in hammering down some kind of AI regulation.
FILE – Intel CEO Pat Gelsinger speaks during an event called AI Everywhere in New York, Thursday, Dec. 14, 2023. (AP Photo/Seth Wenig, File) ·ASSOCIATED PRESS
Regulation takes the onus off of Big Tech to make important decisions about how they operate their services while ensuring there’s a single piece of legislation that governs the use of AI across the country, rather than a state-by-state patchwork of rules.
The Biden Administration attempted to implement AI regulation through an executive order seeking to allow for the development of new AI technologies while protecting against potential misuses. But Trump’s penchant for deregulation could dismantle Biden’s executive order in favor of a more laissez-faire approach.
However, a lack of regulation in AI could be problematic down the line.
“We’ve seen when that happens,” explained Carnegie Mellon University Heinz College professor Ari Lightman. “When that occurs and sort of guardrails are taken off, we have a lot of societal implications associated with it. A lot of harms that get perpetrated, and a lot of people become very, very rich.”
Trump surrogate Musk has repeatedly raised the specter of unchecked AI development, and as the head of xAI, it would make sense for Musk to appeal to Trump for some kind of rules around AI. Of course, it wouldn’t hurt Musk if those rules were relatively malleable.
The second Trump administration will also have plenty of input when it comes to the fate of the CHIPS Act. A hallmark piece of legislation under the Biden Administration, the CHIPS Act is designed to provide funding to semiconductor designers and manufacturers in an attempt to bring chip building back to the US.
But Trump has signaled his displeasure with the $52.7 billion legislation, and House Speaker Mike Johnson said that Republicans would likely repeal the act, before walking the statement back earlier this month.
Nvidia CEO Jensen Huang speaks during Computex 2024 in Taipei on June 4, 2024. (I-HWA CHENG/AFP via Getty Images) ·I-HWA CHENG via Getty Images
While it’s unlikely that the CHIPS Act will be repealed, Trump could seek to push the funding out to companies faster while cutting down on red tape around the development of manufacturing facilities.
“The CHIPS Act is extremely unlikely to be repealed. There is bipartisan support for industrial policy, especially for chips,” Rhodium Group director Reva Goujon told Yahoo Finance.
But during an appearance on Joe Rogan’s podcast, Trump derided the CHIPS Act and said that he preferred to instead put tariffs on chips from overseas as a way to force companies to build chip plants in the US.
Tariffs would mean companies importing chips from overseas, whether from Taiwan or China, would have to raise prices on devices that include those semiconductors. And that could hurt the entire tech industry.
“Hardware businesses are going to be impacted because some part of their supply chain exists in China,” explained Harvard Business School professor David Yoffie.
“So whether we’re talking about computers or hard drives or telecommunications equipment, there’s some piece of every part of a supply chain that has either assembly or manufacturing in the Chinese state.”
That could mean higher prices on everything from consumer goods like PCs and smartphones to AI chips for high-powered enterprise servers. Now we just have to wait until Trump is sworn in on Jan. 20 before we can find out the full impact of his proposals on the tech industry.
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Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.
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