2 weeks Ago By Bloomberg
Silicon Valley is bracing for a vastly different relationship with the US government as Donald Trump returns to the White House with promises to undo many of his predecessor’s policies and Elon Musk poised to play an influential role. On artificial intelligence, Trump has vowed to rip up an executive order from President Joe Biden aimed at putting safety guardrails on the emerging technology. In antitrust, the new administration is expected to seek a lighter touch with merger oversight, while on semiconductors, the president-elect has expressed misgivings about a bipartisan program using government investment to boost domestic chip production.
Industry leaders could see a reprise of the tense relations during Trump’s first term, when he clashed with some tech executives including Amazon.com Inc. founder Jeff Bezos and cultivated cordial ties with others such as Apple Inc.
CEO Tim Cook. Since leaving office, Trump has complained that Alphabet Inc.’s Google suppresses good news about him and accused Meta Platforms Inc.
of unfairly banning him from Facebook and Instagram in 2021. Trump had support from some of tech’s biggest names, led by Musk, the world’s richest man, who poured more than $130 million of his own money into a pro-Trump super-PAC and Republican congressional campaigns. Musk addressed a rally in Pennsylvania for Trump and used his ownership of X — the social-media site formerly known as Twitter — to amplify the Republican’s message to hundreds of millions of users.
Musk’s proximity to the president-elect positions him to shape policies affecting his biggest ventures, including Tesla Inc. and SpaceX, potentially leaving his competitors in the electric-vehicle and space industries at a disadvantage in contracts and government oversight. Other tech billionaires found ways to boost their standing with Trump.
Meta CEO Mark Zuckerberg called Trump’s response to the July 13 assassination attempt “badass,” while Facebook removed many of its guardrails aimed at combating misinformation. Washington Post owner Bezos spiked the newspaper’s editorial endorsing Vice President Kamala Harris less than two weeks before the election. How much Trump can accomplish as president will depend on whether Republicans retain control of the House.
They’ve already retaken the Senate from Democrats, making it easier for him to get his nominees confirmed. Here’s a closer look at what tech can expect from the incoming Trump administration: Trump intends to replace the measure that Biden signed last year setting voluntary security and privacy guidelines for AI developers. That order sought more funding for AI research, gave the National Institute of Standards and Technology a larger role in crafting guidance to mitigate risk and created a new agency to test and evaluate AI models before they’re released.
While offering few specifics, the president-elect has called the Biden policy “dangerous” and claimed it hinders innovation. Trump has said he would replace it with “AI development rooted in free speech,” echoing criticism from other Republicans of Biden’s effort to ensure AI use is equitable and free from algorithmic bias. “In some right wing policy circles, safety is seen as a synonym for censorship,” said Gregory Allen, director of the Wadhwani AI Center at the Center for Strategic and International Studies.
Parts of Biden’s AI agenda could survive, including his push for more AI infrastructure. The Trump campaign has highlighted the need to expand US energy capacity to stay competitive in AI, which could result in loosened permitting hurdles for land and electricity usage, Allen said. Trump may seek to preserve Biden’s recent memorandum making AI a national security priority and pressing agencies to maintain US leadership by keeping the technology that underpins it away from adversaries like China.
Trump could also take action through export controls that go further than Biden’s current restrictions. It’s not yet clear who Trump would appoint to lead AI policy, however Vice President-elect JD Vance could play a major role, given his Silicon Valley experience. Vance has already expressed skepticism about regulation, arguing that guardrails would only tighten large AI companies’ grip on the industry while stifling smaller startups.
He’s also supported open-source technology to guard against perceived left-wing bias in AI models. A second Trump administration may be friendlier to business tie-ups, but is likely to keep up the aggressive pursuit of antitrust cases targeting Big Tech. Federal Trade Commission Chair Lina Khan will be asked to step down, making way for Trump to appoint a third Republican to the agency.
In the meantime, he will likely select one of the agency’s sitting GOP members — Andrew Ferguson or Melissa Holyoak — to serve as the acting chair. The Justice Department’s top antitrust officials including Biden appointee Jonathan Kanter will also step aside, leaving the agency in the hands of career staff until Trump’s picks take the helm. Both agencies are likely to continue lawsuits aimed at the tech giants.
Some companies, such as Amazon.com, which faces an antitrust suit aimed at its core e-commerce business, may seek to settle with the new leaders. Other monopolization cases could see changes or settlements, including the Justice Department’s lawsuits against Live Nation Entertainment Inc.
and Visa Inc.. Republicans at the FTC are also likely to pull back on the agency’s rulemaking efforts, a priority under Khan that GOP members have staunchly opposed.
Though it would be a drastic and unlikely move, a Trump administration could simply drop any Biden-era cases it doesn’t like. The greatest shift may be in the agencies’ approach to mergers. While the first Trump administration challenged some high-profile transactions, such as Visa’s move to buy fintech startup Plaid Inc.
, it generally took a friendlier approach, often allowing major deals to move forward with conditions. Some major firms contemplating deals — including Qualcomm Inc. and health insurance giants Cigna Group and Humana Inc.
— have delayed finalizing proposed transactions until after the election, hoping for a more favorable attitude under the new administration. Trump has said he opposes banning TikTok, a reversal from his stance in his first term when he signed an executive order requiring the popular app to shut down unless its Chinese owner ByteDance Ltd. divests.
It’s unclear how he would spare the platform from enforcement of a new federal law — now tied up by a court challenge — that would bar TikTok absent a sale by Jan. 19, a day before his inauguration. The president-elect now sees the video-sharing app as a viable competitor to Meta, which drew his ire for barring him from its sites after his supporters attacked the US Capitol on Jan.
6, 2021. Americans are less supportive of a possible ban than they were a year ago, according to Pew Research data released in September that found only 32% in favor, down from 50% in March 2023. Trump’s victory introduces significant uncertainty for US semiconductor policy, which under Biden has included spending tens of billions on domestic chip manufacturing and using trade and investment restrictions to counter China’s efforts in critical electronic components.
The president-elect recently assailed the 2022 Chips and Science Act, a landmark bipartisan law that’s accelerated investments from companies including Intel Corp. and Taiwan Semiconductor Manufacturing Co. — the latter of which was announced during Trump’s first term.
He suggested that tariffs against foreign chipmakers would be more effective than direct subsidies to revitalize American semiconductor manufacturing, raising fears in the industry that his administration may seek to change preliminary Chips Act awards. That adds to pressure on Biden administration officials who are seeking to reach binding agreements with companies before the president leaves office. On the international front, Trump has pledged sweeping tariffs on Chinese exports and would likely increase duties on older-generation chips, which Biden raised to 50%.
He may also tighten export curbs on advanced semiconductors, a Biden measure that has roots in Trump’s first administration, though diplomats and industry lobbyists are preparing for a range of possibilities given the transactional nature of Trump’s foreign policy. Perhaps the biggest question is how Trump would approach Taiwan, the beating heart of the global chip industry. He’s claimed Taiwan “stole” the US semiconductor business and argued the island should pay more for its own security.
The stakes are enormous: A Chinese invasion of Taiwan — where more than 90% of advanced chips are produced — would be a $10 trillion hit to the global economy, according to estimates from Bloomberg Economics..
