Trump's second term: what can the tech world expect?
Later today, the inauguration of the elected US president Donald Trump will take place. From AI to semiconductors, what can the tech world expect from his second term?
Published on January 20, 2025
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Donald Trump's return to the White House has sparked a significant stir in the tech world. This administration is anticipated to reverse many policies from the Biden era, particularly in technology. Notably, there is a push to dismantle Biden's AI safety guardrails, reflecting a broader trend toward deregulation. Major tech mergers could become more feasible with a lighter touch on antitrust matters.
The presence of influential allies, such as Musk, who had a sizeable financial role in the campaign, suggests that tech billionaires might wield unprecedented influence, potentially steering significant policy shifts. TikTok and Google face decisions that could redefine their business haven and challenges as the administration navigates policy inconsistencies. Consequently, these shifts may reshape digital landscapes and alter competitive dynamics in the tech industry.
Tech leaders' influence
The inauguration marks a significant shift in tech leadership dynamics, with Elon Musk emerging as a particularly influential figure. Having contributed $277 million to Team Trump, Musk's personal wealth saw a remarkable increase from $262 billion to $449 billion following Trump's victory. This financial commitment has potentially secured him a position of unprecedented influence, with speculation about his oversight of a new Department of Government Efficiency. The tech billionaire's transformation from a Trump critic in 2016 to a key ally in 2025 reflects broader changes in the relationship between Silicon Valley leadership and political power.
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AI policy overhaul
Trump's administration is poised to implement significant changes in AI regulation, with plans to dismantle Biden's executive order on AI safety. During his campaign, Trump called Biden's order "dangerous" and "anti-innovation." Therefore, changes in this policy can be expected, oriented towards deregulation.
This shift reflects a fundamental change in approach to AI governance, with some policy circles equating safety measures with censorship. The move towards deregulation could particularly impact major AI companies like OpenAI, Google, Microsoft, and Meta. This regulatory rollback might accelerate AI development but raises concerns about safety oversight.
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Shifting digital landscape
The administration's approach to digital platforms shows notable policy reversals. Trump has altered his stance on TikTok, now opposing a ban, while Meta has responded by removing misinformation guardrails. The new US president sees TikTok as a competitor to Meta, which angered him by denying him access to its websites following the Capitol Hill assault on January 6, 2021.
The administration is expected to take a more lenient approach in antitrust matters, potentially benefiting tech giants facing regulatory scrutiny. Notably, Google's position appears more favorable under Trump than it would have been under a continued Biden administration, though final outcomes remain dependent on Department of Justice and FTC leadership confirmations.
Semiconductor strategy shake-up
A significant policy shift is emerging in semiconductor manufacturing, with Trump expressing skepticism about the bipartisan Chips and Science Act. His administration suggests replacing subsidies with tariffs on foreign chipmakers. This approach could have far-reaching implications for global tech supply chains, particularly given Taiwan's strategic importance in chip production. According to Bloomberg Economics, potential geopolitical tensions could risk a $10 trillion global economic impact.
Trump has been vocal throughout the election season about his opinions against the American chip sector. He voiced concerns about Taiwan's dominance in the U.S. chip business, primarily through firms like TSMC, and attacked the CHIPS Act. Trump claimed that Taiwan's excessive technological dominance impacted national security. According to him, the United States ought to put more pressure on other countries to expand their manufacturing capabilities. To further bolster American independence in this area, there is conjecture over a potential reform of the CHIPS Act, maybe referred to as a "CHIPS Act 2.0."