The News
US President Donald Trump’s “Liberation Day” tariffs have escalated a burgeoning trade war that will spare few of America’s biggest tech companies: Giants like Apple and Amazon rely heavily on manufacturing and imports from China and elsewhere — both have seen their stock price swing wildly as investors weigh the cost of disrupted global supply chains — while Europe is one of US tech’s biggest markets.
At home, some of what the industry has long criticized as the biggest barriers to technological innovation remain. Tech leaders such as Marc Andreessen had hoped that the Trump administration would diverge from the Biden-era regulatory stance, especially around antitrust.
But that hasn’t happened, and Meta is facing a major antitrust trial next week.
SIGNALS
Big Tech is yet to see the deregulation industry leaders had hoped for
Much of the Silicon Valley swing to the right last year centered around a promise of deregulation under Donald Trump, something venture capitalist Marc Andreessen cited as a major part of why he endorsed Trump’s reelection bid after voting Democrat for years. But so far, Trump’s second administration has signaled the opposite, continued many Biden-era initiatives, and indicated they will take a “strong approach” to antitrust enforcement, analysts said. Meta’s looming antitrust trial will be the “first big test” of Trump’s Federal Trade Commission’s stance toward Big Tech, the Financial Times wrote: FTC Chair Andrew Ferguson has vowed the watchdog will “never back down.”
Market uncertainty, tariffs could risk AI spending, investments
Trump’s tariffs could put “major pressure” on tech companies’ plans to spend trillions building out new data centers, one analyst told Data Centre Magazine. The AI construction boom heavily relies on access to imported steel, for example, which faces 25% duties. A shortage of steel and other construction materials, as well as possible labor deficits, may exacerbate existing supply chain bottlenecks and will likely force firms to reevaluate their development strategies, Data Center Frontier reported. AI start-ups are likely the most at risk: “The safest modus operandi is to assume your last [venture capital] fundraise is indeed your last one for a while,” venture firm Hustle Fund told its portfolio companies Monday.
Rift with Europe threatens one of American tech’s biggest markets
Big Tech’s efforts to cater to the Trump administration “threaten to undermine [their] business model across much of the world,” Foreign Affairs wrote, especially in Europe, their biggest foreign market: Tariffs and Washington’s increasingly sour relationship with Brussels has heightened the already tense relationship between Silicon Valley and European regulators. The bloc is reportedly weighing a possible tax or other measure on digital services, something that could risk escalating the trade war “significantly,” The New York Times’ Brussels bureau chief told The Daily podcast. A firmer stance could also encourage European tech firms to build alternatives to American products, Foreign Affairs noted, which if they succeed, would also hurt US firms’ bottom lines.