Big Tech, Regulation and the Impact on Markets

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Trump’s stance on ‘Big Tech’ remains selective, and experts now predict he will apply pressure where he perceives the most significant threats, particularly to companies viewed as ‘liberal’ or ‘woke’. During his first term, Trump openly criticised platforms like Google and Facebook for alleged censorship and political bias. While some enforcement actions were initiated under his administration, Trump’s second term looks likely to further increase scrutiny over platforms associated with liberal agendas. Taking a very brief look at what Trump 2.0 will mean for each of the key Big Tech companies:

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– Google looks likely to face intensified scrutiny for alleged censorship and market dominance. Trump’s administration may continue pursuing existing antitrust cases against it.

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– Meta (Facebook) may be expected to encounter increased regulatory pressure due to perceived liberal bias in content moderation, potentially impacting its ad revenue model and platform management.

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– Apple could see renewed pressure over its app store practices and dominance in mobile technology, with Trump’s past criticisms suggesting possible trade tension with the EU around Apple’s tax benefits.

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– OpenAI could benefit from Trump’s pro-business stance, with fewer regulatory restrictions on AI innovation, though ethical concerns around AI use may remain underplayed.

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– Amazon looks likely to find favour under Trump’s “America First” approach, potentially experiencing lighter regulation due to its economic contribution and logistical influence in the U.S. market.

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Alignment With Trump Could Mean a Reprieve

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Another view, however, is that companies and leaders who align themselves with Trump may see a reprieve from regulatory constraints. A notable example is Elon Musk’s X (formerly Twitter) and Amazon, the latter likely benefitting from Trump’s renewed “America First” economic agenda. As Max von Thun, Director at the Brussels-based Open Markets Institute, recently commented, “Big Tech corporations seen as ‘woke’ or ‘liberal’ like Google or Meta will continue to face regulatory pressure, while others explicitly allied with or at least tacitly supportive of the administration may escape scrutiny.”

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This selectivity could, therefore, exacerbate polarisation within the tech sector. Companies willing to align with Trump’s policies may thrive, while those unwilling to adapt could face scrutiny that impacts their market valuation.

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Trump’s Stance on International Tech: China, Trade Wars, and the Global Impact on Tech

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Trump’s return to office signals a likely resurgence of his hardline stance on international tech competition, particularly with China. During his first term, he imposed significant tariffs and restrictions on Chinese technology companies, citing concerns over intellectual property theft, national security, and economic competition. Key players such as Huawei, ZTE, and TikTok faced bans and restrictions in the U.S. market, with Trump warning of data privacy and security risks linked to Chinese tech influence. With a new term, experts expect Trump to reinitiate or intensify similar measures, which could have ripple effects across the global tech landscape. The effects could include, for example:

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Increased scrutiny on Chinese tech companies. U.S. restrictions on Chinese firms may expand beyond telecommunications, potentially targeting industries like semiconductors, AI, and social media. Companies like Huawei and ByteDance, which owns TikTok, could face further challenges operating in the U.S. market and accessing American technology.

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Supply chain disruptions and tech manufacturing. Renewed trade tensions could disrupt global tech supply chains, with many U.S. companies reliant on Chinese manufacturing for essential components. Apple, for instance, has significant manufacturing operations in China, and further trade restrictions may prompt it and others to explore alternative manufacturing locations, such as India or Vietnam. This shift could increase costs for U.S. tech companies, potentially affecting product pricing and availability.

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Impact on the semiconductor industry. The global semiconductor industry, already strained by shortages, may see further complications as Trump looks to reduce U.S. dependence on foreign-manufactured chips. Measures such as additional subsidies for U.S. semiconductor manufacturing or restrictions on Chinese imports could reshape the industry. This may encourage companies like Intel to accelerate domestic production, though it would likely take years to fully reduce reliance on international supply chains.

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Effects on AI and emerging technologies. China’s rapid advancements in AI and 5G technology have been viewed as a direct challenge to U.S. tech supremacy. Trump’s renewed focus on limiting Chinese access to American technology and intellectual property could lead to stricter export controls on AI-related tech, as well as federal funding initiatives to boost U.S.-based research and development. While this may benefit U.S. innovation, it also risks heightening tensions and slowing global tech collaboration.

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Trump’s approach could, therefore, bring both benefits and disruptions to the tech world. While U.S. companies focusing on domestic production and development may find increased support, the international tech ecosystem may suffer from reduced collaboration and supply chain stability. Ultimately, Trump’s trade policies are likely to reshape the competitive dynamics in tech, challenging companies to adapt swiftly to avoid the negative effects of trade wars and protectionism.

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Markets Reacting Already

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Markets are already responding, with Alphabet’s share price fluctuating amid fears of further regulatory action, whereas Tesla saw a 15 per cent jump following the election. This appears to reflect investor confidence in Musk’s strengthened influence under Trump’s administration and the potential for more favourable regulatory conditions for Tesla.

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For companies in the crosshairs, the next four years could be challenging, as Trump has suggested he may rein in antitrust measures to prevent Big Tech monopolies. His reluctance to break up Google, for instance, implies that the administration’s approach will focus on restructuring the sector, rather than dismantling key players.

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A New Era of Favourable Cryptocurrency Regulation

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Trump’s return to office has buoyed the cryptocurrency market, with Bitcoin reaching record highs as investors anticipate a more favourable regulatory environment. In stark contrast to his previous stance on digital currencies, Trump’s administration now appears to embrace the innovation and decentralisation that cryptocurrencies represent. The Republican Party’s platform now opposes the creation of a Central Bank Digital Currency (CBDC) and champions the right to mine and trade cryptocurrencies without government interference.

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Matthew Dibb, Chief Investment Officer at Astronaut Capital, has summarised the shift, saying, “A Democrat win would have felt like a short-term nail in the coffin [for crypto]… the market is placing high importance on it.” As the crypto landscape matures, Trump’s administration will likely task the Commodity Futures Trading Commission (CFTC) with overseeing crypto as a commodity rather than a security, which could attract substantial institutional investment.

For smaller tokens and emerging projects, this regulatory openness could be transformative, fostering innovation while offering investors reassurance. However, the volatility in cryptocurrency will persist, as federal and state authorities may still push for individual oversight, especially given recent scrutiny over the risks and regulatory gaps surrounding crypto exchanges and platforms.

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Autonomous Vehicles and AI with New Freedom

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Autonomous vehicles (AV) and AI, two pillars of technological advancement, also look set to evolve under Trump’s governance. With Elon Musk now appointed as the administration’s “efficiency czar,” there is a strong possibility that Tesla’s ambitious AV and robotaxi projects will face reduced regulatory oversight. Sources close to Musk’s team have suggested that Tesla’s primary goal in the coming years will be ‘de-enforcement’ of existing regulations that slow down AV deployment.

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Musk’s frustration with the National Highway Traffic Safety Administration (NHTSA) is well-documented, especially regarding the regulatory barriers Tesla faces with its driver-assistance systems, Autopilot and Full Self-Driving. Under Trump, Musk may be able to achieve the nationwide regulatory consistency he has advocated for, which could accelerate the rollout of driverless Teslas by next year and the production of a fully autonomous “Cybercab” by 2026.

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xAI

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The AI sector is also likely to see transformative changes. Musk’s new AI venture, xAI, stands to gain from looser regulations and an administration eager to keep America competitive against global tech powers. Some insiders suggest that Musk’s influence will encourage a streamlined approach to AI oversight, reducing potential barriers for businesses in machine learning and deep learning. Although promising, this regulatory leniency brings potential risks, as untested or insufficiently regulated technology could pose safety and ethical dilemmas.

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Social Media and Trump’s Own Platform

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Trump’s re-election has impacted (as expected) and will further impact his personal social media company, Trump Media & Technology Group (TMTG), which owns Truth Social. The platform saw an initial stock spike following the election, briefly reaching a valuation of nearly $9 billion before receding. Truth Social, which has struggled to establish revenue streams and monetisation strategies, may now become a central player in Trump’s communication arsenal.

Many think that Truth Social serves as a litmus test for how markets perceive Trump’s influence, with fluctuations in its share price often echoing public sentiment around his policies and actions. Trump has voiced strong support for Section 230, the law that protects social media platforms from liability over user-generated content. Maintaining Section 230 could enable both Truth Social and Musk’s X to continue prioritising “free speech” over strict content moderation, a strategy that aligns with Trump’s long-standing critiques of mainstream media.

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Beyond this, Trump may pursue bipartisan legislation that strengthens data privacy and protects younger users on social media. The American Privacy Rights Act (APRA) and the Kids Online Safety Act (KOSA), both of which have bipartisan backing, could define a Trump legacy in social media legislation. For example, Mark Weinstein, a tech entrepreneur and author of Restoring Our Sanity Online, has suggested that Trump’s legacy may revolve around “measures that reduce biased moderation, strengthen privacy rights, and protect kids online.”

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The Elon Musk Factor in Space, Regulation and Wealth

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Elon Musk’s support from Trump’s campaign and now role in Trump’s administration is one of the most significant shifts under the new presidency. Trump describing Musk as a “super genius” and Musk’s appointment as “efficiency czar” (as the head of a government efficiency commission) marks a dramatic turn in the relationship between government and private enterprise, now positioning Musk as a key influencer in policy. With billions invested in federal contracts, Musk’s companies—Tesla, SpaceX, and Neuralink—are now expected to enjoy an era of favourable regulation and expanded funding opportunities. For example, Musk’s new efficiency role will allow him to streamline government operations, potentially cutting costs and reducing regulatory hurdles that could benefit his own businesses and others in tech.

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Space exploration, for a long time one of Musk’s goals, could see a push towards deregulation, benefiting SpaceX’s ambitions to establish a human presence on Mars. With Trump’s support, Musk’s vision of turning the U.S. government into a “startup” could become a reality, enabling quicker approvals for experimental space missions and potentially facilitating a unified regulatory framework for private space travel.

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However, critics argue that this laissez-faire approach might compromise safety, particularly in a field as high-stakes as space exploration. A former SpaceX official has commented (Reuters) that “taking a lax regulatory attitude in a sector as dangerous as rocket-building could blow up in everyone’s face and set back the industry for a decade.” This risk, however, does not appear to faze Musk, who has been candid about his desire to eliminate what he deems “insane” regulations.

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Trump’s endorsement has already yielded Musk a significant financial gain, with Tesla shares rising sharply post-election and Musk’s wealth increasing by an estimated $15 billion. It’s easy to see, therefore, what Musk sought to gain through his support for Trump; this alliance looks likely to cement his political influence and position his companies advantageously for the foreseeable future.

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Future Implications for Global Tech and Beyond

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Trump’s policies, though primarily focused on the United States, are expected to have wide-reaching effects globally, with significant implications for Europe. His renewed “America First” stance could strain transatlantic relations, particularly as the European Union enforces increasingly stringent regulations on U.S. tech giants over issues like data privacy, content moderation, and market dominance. Trump’s previous threats of retaliation against the EU for tax-related rulings, such as those against Apple, suggest a rocky path ahead, with the possibility of intensified trade tensions. In response, European nations may bolster their regulatory framework, aiming to protect their own tech industries while reducing dependence on American firms.

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Implications for the UK

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For the UK, Trump’s return could mean that the government may find itself needing to balance its own regulatory ambitions with fostering strong trade relations with the U.S. While Brexit provided the UK with the independence to shape its own digital and tech regulations outside of the EU’s influence, this autonomy could come under strain if U.S. policies diverge sharply from British interests. For example, with Trump’s inclination towards industry-friendly, low-regulation policies, there may be pressure for the UK to avoid implementing stringent tech controls that might hinder U.S.-UK trade agreements or collaborations with American tech firms.

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Also, on the more positive side, UK-based tech companies could find new avenues for partnership and investment under a Trump administration that seeks to counterbalance European regulations. However, the UK’s own goals for data privacy, cybersecurity, and content moderation may necessitate a careful diplomatic approach to avoid conflicting standards with the U.S.

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Looking Ahead

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The tech landscape faces a period of both innovation and instability. Trump’s selective approach to regulation could stimulate growth within certain sectors, such as AI and crypto, while introducing uncertainty in areas like AVs and space travel. The broader consequences of Trump’s return on technology will depend heavily on the balance he strikes between promoting corporate freedoms and safeguarding public interests. For now, as markets adjust and Big Tech leaders navigate this renewed relationship with the U.S. government, the tech world watches closely, poised for what may be an era of unprecedented change.

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What Does This Mean for Your Business?

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While companies such as Amazon and Musk-led ventures may thrive under a friendlier regulatory approach, others, particularly those associated with liberal values, may find themselves contending with intensified oversight.

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For the U.S., Trump’s preference for relaxed regulations on emerging technologies like AI, autonomous vehicles, and cryptocurrency may invigorate domestic innovation, providing companies with greater operational freedom. However, these benefits carry risks, particularly in safety-critical sectors like space exploration, where a reduction in oversight could lead to unforeseen setbacks. Musk’s expanded influence in shaping policies, coupled with his high-stakes ambitions, epitomises this tension between rapid progress and potential vulnerability.

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Internationally, Trump’s hardline stance on Chinese technology and “America First” trade policies may disrupt global supply chains and further strain transatlantic relations. For the UK and EU, this shift could mean balancing independent regulatory ambitions with the practicalities of maintaining favourable trade and tech alliances with the U.S. As European regulators tighten their own frameworks, American companies may find it harder to operate across borders, and some may even seek to relocate operations to more favourable environments.