Trump’s Return Could Bring Deregulation, Impact Big Tech’s Future

Donald Trump's return to the White House could have significant implications for the technology sector. After a first term with multiple run-ins with industry leaders, Trump's relationship with Silicon Valley tech giants has become more positive, which could lead to new regulatory and policy approaches that benefit technology, AI, and cryptocurrencies.

Trump's second term could open the door to deregulation and reconfiguration of the relationship between the government and major tech companies, argues the New York Times. This shift could reduce regulations and strengthen policies that favor the most powerful tech players.

"Overall, I think Trump wants to pump up AI investments and roll back a lot of regulations on AI bias and safety," says Evelyn Mitchell-Wolf, Analyst, EMarketer. 

Trump and The Big Tech

During his first term, Trump had complex relationships with big tech companies like Twitter (currently X), Amazon, and Google. The Trump administration not only criticized their practices, but also threatened them with stricter regulations and sanctions, especially regarding information control and national security concerns over platforms controlled by "rival nations," such as China. 

However, several of the industry's most prominent leaders, such as Elon Musk (Tesla, SpaceX), Jeff Bezos (Amazon), Tim Cook (Apple), Mark Zuckerberg (Meta), and Sundar Pichai (Google), have shifted their focus and have begun to cultivate closer relationships with the incoming administration. These moves come in response to expectations that the Trump administration will favor less restrictive policies for the industry, which could have long-term effects on how technology companies operate both domestically and internationally, report multiple media sources.

“Like nearly every entity that has tried and failed to bend Trump to its will,” says Michael Scherer and Ashley Parker for The Atlantic, “the tech elites largely seem to have decided that they are better off seeking Trump’s favor.”

Specific Strategies

Each tech giant has taken a different approach. For Google, Trump's return to the presidency could represent an opportunity to avoid intensifying antitrust investigations that have focused on the company during Biden's tenure, reports The New York Times. Despite Trump's criticism of Google in years past, EMarketer notes that the company may find ways to align its interests with those of the new administration, allowing it to ease legal pressure.

Microsoft had adopted a critical stance during Trump's first term, especially on issues related to the 2018 immigration policies. However, in a second term, the company has adopted a more pragmatic stance, seeking to protect its strategic interests in areas such as cloud computing and AI. The relationship between Microsoft and the Trump administration could become more cooperative, especially with the administration's focus on deregulation of the technology sector, and recent announcements of upcoming meetings between Bill Gates and Trump.

On the other hand, Meta (formerly Facebook), which in the past had strained relations with the Trump administration, has begun to take steps that could better align with the new administration's policies. These moves include scaling back diversity and inclusion programs and easing restrictions on social media, especially on issues related to groups such as the LGBTQ community, immigrants, and women.

Apple and Amazon could also benefit from more favorable policies, especially in terms of trade and tariffs. Apple has advocated for tariff exemptions for its Chinese-made products, while Amazon is seeking to rebuild stronger relationships with the federal government to secure key contracts.

Musk and TikTok

Musk has become one of Trump's most visible allies within the technology sector. He openly supported Trump and funded his campaign with US$277 million, reports CBS News. In addition to his political support, according to The New York Times, Musk could gain significant influence within the Trump administration, possibly in an official role that could give him even more power over government policies affecting companies like Tesla and SpaceX. 

"No one in Silicon Valley had ever put so much weight on the scale in history. And no one will benefit more from a second Trump term in office than Musk, who will become America's most powerful entrepreneur (if he was not already)," reads a New York Times article on the subject.

Meanwhile, TikTok’s relationship with the Trump administration remains shaky. During his first term, Trump threatened to ban the platform due to national security concerns. However, a second term could provide TikTok with an opportunity to resolve these issues, as the Trump administration has been unwilling to impose Biden’s proposed restrictions to ban the platform if ByteDance, owner of the platform, does not sell the majority of its share in the local market.

However, the situation remains volatile and will depend on how Trump's stance towards China and international technology policies evolves. For the time being, Trump signed an executive order pausing the ban on TikTok in the United States. According to the order, the ban will be paused for 75 days "to seek a resolution that protects national security while saving the platform used by 170 million Americans."

"Basically, I have the right to sell TikTok or shut it down," Trump said on Monday. "We may have to get approval from China".

Trump's AI and Crypto Policies Expected Impact

One of the main changes expected under a second Trump term is the implementation of deregulation policies, especially in key areas such as AI and cryptocurrencies. During the first hours of his term, Trump repealed a 2023 executive order signed by former President Joe Biden that sought to reduce the risks of AI to consumers, workers, and national security.

Biden's order required developers of AI systems to share safety test results with the US government, in accordance with the Defense Production Act, before they were made public. The order also urged agencies to establish standards for such testing and address related chemical, biological, radiological, nuclear, and cybersecurity risks.

Companies investing in AI and other emerging technologies, such as OpenAI, Google, Microsoft, and Meta, could benefit from a reduction in regulations on AI bias and safety, which would allow them to operate with greater freedom and accelerate innovation in these fields, reports EMarketer.

The crypto-industry could also benefit. In his campaign, Trump pledged to remove regulatory barriers for cryptocurrencies and remove key figures such as Gary Gensler, Chairman, US Securities and Exchange Commission (SEC), who has been criticized for imposing severe restrictions on the cryptocurrency market. Just the day of his takeover, the price of Bitcoin reached an all-time high of over US$109.000, although to the next day dropped to US$103.000.