Musk put his entire weight behind Trump in a way that no business person has done in the past for any Presidential nominee, which included funding his campaign and turning social media platform X into a pro-Trump megaphone.
With Trump’s reelection as the United States’ President, tech company heads and workers have to contend with a new reality. While many of them have typically voted for the Democratic Party, with some publicly supporting Kamala Harris’s election bid and some sitting on the fence publicly, they will all face the consequences of Trump’s new term in office.
Under Trump’s first tenure, a number of movements happened in the tech space, which saw the beginning of antitrust action against companies like Meta, Google Apple and Amazon; the trade war with China, which prevented the export of some high-end American-made hardware solutions to Beijing
In his reelection bid, Trump spoke against the Biden administration’s move to breakup Google, even though the investigation into the company started in his term. His stance on TikTok’s fate in the US remains uncertain and has been marked by flip-flops, and his protectionist stance against China could pose a challenge to companies like Apple.
Some contentions would be new for him. When he left office in 2020, artificial intelligence (AI) had not attained the momentum it has today. When he begins his second term, AI is all the tech world is talking about. Trump has made some initial signals that he may not go hard on AI regulation, and with some of the influential Silicon Valley people rallying behind him, that stance might not change.
Trump’s victory marks vindication for at least one tech mogul – Elon Musk. He put his entire weight behind Trump in a way that no business person has done in the past for any Presidential nominee, which included funding his campaign and turning social media platform X into a pro-Trump megaphone. There is speculation that Musk might get a role in the Trump administration – he has suggested Trump might put him in charge of a new “department of government efficiency” that would cut government workforce.
Antirust
Trump could get rid of appointees of the Biden-era, which includes anyone associated with the former administration’s antitrust battles with the big Silicon Valley tech companies. Trump has already said he would fire Lina Khan, the head of the Federal Trade Commission, who spearheaded the agency’s cases against companies like Amazon and Meta.
While heads of all big tech companies have congratulated Trump on his victory, some doubled down even before the elections. Washington Post, which is owned by Amazon’s Jeff Bezos, did not endorse any candidate in this election, which was widely viewed as tacit support for Trump.
In the run-up to elections, Musk has posted online about apparent biases in workers at tech companies like Google and Microsoft and some of their products. He has also questioned political funding made by employees of these companies. Silicon Valley workers and leaders have traditionally leaned towards the Democratic Party, and Trump 2.0 could pose a difficult balancing act for them.
Tariffs and trade wars
During his campaigning, Trump had proposed a 60% tariff on goods from China — and a tariff of up to 20% on everything else the United States imports. This was widely seen as an impediment to companies like Apple, which have a big manufacturing base in the country. Apple has moved some of its production to countries like Vietnam and India, but a substantial amount of its products and components are still made in China. Any retaliatory action against Beijing by Trump, could possibly pose a challenge to Apple’s supply chains.
There is another layer to Trump’s actions against China. His newfound ally Elon Musk. Musk’s Tesla has major business interests in China where the company has a big manufacturing base, and any action on China by Trump could have a potential bearing on Tesla’s business in Beijing. Trump has returned to power largely by tapping into protectionist and nationalist sentiments within American voters. There could be some moderation by Trump as far as his anti-China policies are concerned, but it could be tricky for him to manoeuvre around the issue.
AI
Trump has vowed to repeal the Biden-era executive order on AI, as he looks for more avenues to overturn his predecessor’s legacy. That order, issued last October, required companies developing AI models to inform the US government about how they were training and securing those models, and open up their systems to probe for vulnerabilities.
Trump allies in the tech sector have said that the order placed onerous requirements on AI companies, which were only starting to take off at the time, and called for its rollback. Famed tech investor and co-founder of one of the most influential Silicon Valley venture funds, Marc Andreessen — who had endorsed Trump for President – has been a long-time AI regulation denier, and has said his support for Trump was majorly because he would support the country’s tech ecosystem, particularly start-ups.
It is unlikely that the next four years under Trump’s rule would see any major regulatory movement in the AI space.
Uncertainty and flip-flops
The run up to this year’s Presidential election marked a number of flip-flops from Donal Trump over his stand on tech regulations. When a judge in a US District Court held Google to be a monopoly, initiating conversation around a breakup of the company, Trump indicated that the move could go too far, despite the fact that the investigation into the company initiated during his previous term in office.
Then there’s TikTok, which is widely popular among young American voters. In 2020, Trump had said it would ban the app unless its Chinese parent, ByteDance, sold it to an American owner. At the time, the conversation gained some steam, with companies like Oracle lining up to buy TikTok. Those conversations soon died down, and Trump was out of office after a while.
The Biden administration followed in Trump’s footsteps and went a step further, by signing a bill into law that would again force ByteDance to sell the app or face a ban. But in another reversal, Trump has since suggested that he does not support the law, and even joined TikTok in June. It is unclear which way Trump would lean when he is back in office.
Offshore tech
The $245 billion Indian tech sector which employs around 5.4 million people are cautiously optimistic about the resounding victory of Donald Trump as the next US President. The return of Trump is expected to boost increased spending by US firms, leading to the possibility of more revenue for Indian tech companies.
Analysts and experts said there are several ‘ifs and buts’ relating to the opportunities for Indian tech firms. If the past record of the Trump administration is any indication, Indian tech firms are set to gain from Trump’s new plans while H1-B visa holders are expected to face some uncertainties. While there have been concerns regarding Trump’s re-election with respect to tougher H1-B visas, its effect on Indian IT service companies may not be as significant as perceived.
